BONDS: NZGBS: Slightly Richer, Narrow Ranges Ahead Of US Payrolls

NZGBs closed 1bp richer after being 1bp cheaper earlier in the session. Nevertheless, the 2bp range across benchmarks highlighted a willingness to stay on the sidelines ahead of the release of US Non-Farm Payrolls data for October later today. 

• Nonfarm payroll growth is expected to slow materially to circa 100k in October after a booming 254k in September, with significant disruption from strikes and potential hurricane fallout.
• The Fed’s Waller has previously estimated this could drag 100k from payrolls this month although that appears right at the top end of analyst expectations. (See MNI NFP Preview here)
• Locally, house prices and building approvals failed to be market moving, as expected.
• NZ’s National Institute for Water and Atmospheric Research said there is a 53% chance that La Niña developing by the end of 2024, down from 60% reported in early October.
• Swap rates closed flat to 3bps firmer, with the 2s10s curve flatter.  
• RBNZ dated OIS pricing closed 3-9bps firmer, with the later meetings leading. A cumulative 96bps of easing is priced by February, with 55bps by year-end.
• The local calendar is empty on Monday, ahead of the RBNZ’s release of its Financial Stability Report on Tuesday.