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BONDS: NZGBS: Richer After CPI Misses, US Tsys Bull-Flatten

BONDS
BulletMarketsFixed Income Bullets

In local morning trade, NZGBs are 2-3bps richer (3-4bps on the day) after Q3 CPI printed below expectations. 

  • Headline CPI rose 0.6% q/q (+2.2% y/y) in 3Q versus +0.7% (+2.2% y/y) estimate and +0.6% (+3.3% y/y) prior. Tradeable CPI fell 0.2% q/q versus -0.1% estimate and -0.5% prior, while Non-Tradeable CPI rose 1.3% q/q versus 1.3% estimate and +0.9% prior.
  • The US tsy curve bull flattened overnight in post-holiday cash trading, with futures extending the rebound from Monday's lows. A sharp drop in oil prices starting late Monday on an apparent de-escalation in Iran-Israel tensions helped underpin a 20+ tick rally in front TYs through mid-morning trade Tuesday.
  • On that note, SF Fed's Daly reiterated it was a "reasonable thing" to cut one or two more times by the end of the year - overall a relatively cautious tone, in keeping with Monday's appearance by Gov Waller. Atlanta Fed Pres Bostic speaks at 1900ET.
  • Swap rates are 4-6bps lower on the day, with the 2s10s curve steeper.
  • RBNZ dated OIS pricing is 2-3bps softer after the CPI data and 5-9bps softer on the day across meetings. 58bps of easing is priced for the November meeting, with a cumulative 97bps by February.
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In local morning trade, NZGBs are 2-3bps richer (3-4bps on the day) after Q3 CPI printed below expectations. 

  • Headline CPI rose 0.6% q/q (+2.2% y/y) in 3Q versus +0.7% (+2.2% y/y) estimate and +0.6% (+3.3% y/y) prior. Tradeable CPI fell 0.2% q/q versus -0.1% estimate and -0.5% prior, while Non-Tradeable CPI rose 1.3% q/q versus 1.3% estimate and +0.9% prior.
  • The US tsy curve bull flattened overnight in post-holiday cash trading, with futures extending the rebound from Monday's lows. A sharp drop in oil prices starting late Monday on an apparent de-escalation in Iran-Israel tensions helped underpin a 20+ tick rally in front TYs through mid-morning trade Tuesday.
  • On that note, SF Fed's Daly reiterated it was a "reasonable thing" to cut one or two more times by the end of the year - overall a relatively cautious tone, in keeping with Monday's appearance by Gov Waller. Atlanta Fed Pres Bostic speaks at 1900ET.
  • Swap rates are 4-6bps lower on the day, with the 2s10s curve steeper.
  • RBNZ dated OIS pricing is 2-3bps softer after the CPI data and 5-9bps softer on the day across meetings. 58bps of easing is priced for the November meeting, with a cumulative 97bps by February.