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BONDS: NZGBS: Closed Well Off Cheaps, Dramatically Outperformed $-Bloc

BONDS
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The NZGB 2/10 curve twist-steepened, with yields closing 1bp lower to 4bps higher, after a dramatic mid-session reversal. Earlier in the session, NZGB yields had been 4-7bps cheaper after the US tsys negative lead-in from the NY session. 

  • NZ-US and NZ-AU 10-year yield differentials narrowed an impressive 7-8bps on the day.
  • With the local calendar light, the reversal of fortune appeared linked to record investor interest in today’s government bond issue. NZDM issued $5bn of the May-30 bond via a syndicated tap, with the total book size topping $23.9bn. The previous record book size was $22.760bn for the Aug-36 line. Bonds were issued at +15 bps over Apr-29 bond, with a yield to maturity of 4.17%.
  • Cash US tsys are 1-2bps cheaper in today’s Asia-Pac session, extending yesterday’s sharp back-up in yields. Yields had been 1-2bps lower early in the session.
  • Swap rates closed 3-7bps higher, with the 2s10s curve steeper and implied swap spreads 2-3bps wider.
  • RBNZ dated OIS pricing is 2bps softer to 4bps firmer, with July 2025 underperforming. A cumulative 103bps of easing is priced by February, with 57bps by year-end.
  • Tomorrow, the local calendar is empty.  RBNZ Governor Adrian Orr will speak about monetary policy at the Peterson Institute on Thursday.
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The NZGB 2/10 curve twist-steepened, with yields closing 1bp lower to 4bps higher, after a dramatic mid-session reversal. Earlier in the session, NZGB yields had been 4-7bps cheaper after the US tsys negative lead-in from the NY session. 

  • NZ-US and NZ-AU 10-year yield differentials narrowed an impressive 7-8bps on the day.
  • With the local calendar light, the reversal of fortune appeared linked to record investor interest in today’s government bond issue. NZDM issued $5bn of the May-30 bond via a syndicated tap, with the total book size topping $23.9bn. The previous record book size was $22.760bn for the Aug-36 line. Bonds were issued at +15 bps over Apr-29 bond, with a yield to maturity of 4.17%.
  • Cash US tsys are 1-2bps cheaper in today’s Asia-Pac session, extending yesterday’s sharp back-up in yields. Yields had been 1-2bps lower early in the session.
  • Swap rates closed 3-7bps higher, with the 2s10s curve steeper and implied swap spreads 2-3bps wider.
  • RBNZ dated OIS pricing is 2bps softer to 4bps firmer, with July 2025 underperforming. A cumulative 103bps of easing is priced by February, with 57bps by year-end.
  • Tomorrow, the local calendar is empty.  RBNZ Governor Adrian Orr will speak about monetary policy at the Peterson Institute on Thursday.