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BONDS: NZGBS: Closed With A Twist-Steepening As US Tsys Weigh

BONDS
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NZGBs closed with a twist-steepening of the 2/10 curve. Benchmark yields finished 4bps lower to 4bps higher, with the NZ-US and NZ-AU 10-year yield differentials little changed.

  • Cash US tsys are 2-3bps cheaper in today’s Asia-Pac session after yesterday’s twist-steepening. The US calendar sees PPI and jobless claims data later today.
  • Today’s weekly supply saw mixed results, with cover ratios ranging from 2.28x (May-35) to 4.12x (Apr-37).
  • NZ released a number of monthly CPI series for October which account for around 40% of the total CPI index. Most major components posted a monthly rise but food prices posted their first drop since May, leaving the annual rate at 1.2%.
  • With rental growth down on a year ago, food steady and petrol negative, the RBNZ is likely to be reassured that inflation should stay in the band in Q4. It will have updated forecasts at its November 27 meeting.
  • Swap rates closed 2bps lower to 2bps higher, with the 2s10s curve steeper.
  • RBNZ dated OIS pricing is 1-7bps softer across 2025 meetings. A cumulative 87bps of easing is priced by February, with 51bps by year-end.
  • Tomorrow, the local calendar will see the BusinessNZ Manufacturing PMI.
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NZGBs closed with a twist-steepening of the 2/10 curve. Benchmark yields finished 4bps lower to 4bps higher, with the NZ-US and NZ-AU 10-year yield differentials little changed.

  • Cash US tsys are 2-3bps cheaper in today’s Asia-Pac session after yesterday’s twist-steepening. The US calendar sees PPI and jobless claims data later today.
  • Today’s weekly supply saw mixed results, with cover ratios ranging from 2.28x (May-35) to 4.12x (Apr-37).
  • NZ released a number of monthly CPI series for October which account for around 40% of the total CPI index. Most major components posted a monthly rise but food prices posted their first drop since May, leaving the annual rate at 1.2%.
  • With rental growth down on a year ago, food steady and petrol negative, the RBNZ is likely to be reassured that inflation should stay in the band in Q4. It will have updated forecasts at its November 27 meeting.
  • Swap rates closed 2bps lower to 2bps higher, with the 2s10s curve steeper.
  • RBNZ dated OIS pricing is 1-7bps softer across 2025 meetings. A cumulative 87bps of easing is priced by February, with 51bps by year-end.
  • Tomorrow, the local calendar will see the BusinessNZ Manufacturing PMI.