MNI China Daily Summary: Tuesday, October 8

MNI BRIEF: Japan's Sept Sentiment, Outlook Indexes Fall

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CHINA PBOC CONDUCTS CNY41.7 BLN VIA 7-DAY REVERSE REPOS TUES

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BONDS: NZGBS: Slightly Richer, RBNZ Decision On Wed

BONDS
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NZGBs closed flat to 2bps richer across benchmarks after dealing in narrow ranges in today’s local session. With the domestic calendar empty today, local participants largely sat on the sideline ahead of Wednesday’s RBNZ Policy Decision. 

  • However, swap rates closed 1-5bps higher with a flatter 2s10s curve.
  • RBNZ dated OIS pricing closed 4-20bps firmer across 2025 meetings.
  • For Wednesday's RBNZ Policy Decision, the market is pricing in a 74% chance (44bps) of a 50bp cut, with 88bps of easing by year-end.
  • Tomorrow, the local calendar is empty.
  • We have limited US data today, with the focus on the minutes for the September FOMC tomorrow, CPI on Thursday and PPI on Friday. Note, that Friday also sees the start of the latest earnings cycle with Bank of NY Mellon, Wells Fargo, JP Morgan and Blackrock announcing.
  • Cash US tsys are 2-5bps richer, with a steepening bias, in today’s Asia-Pac session after Fed's Musalem stated that the current monetary policy path remains appropriate despite recent jobs data.
  • On Thursday, the NZ Treasury plans to sell NZ$200mn of the 0.25% May-28 bond, NZ$250mn of the 4.25% May-34 bond and NZ$50mn of the 1.75% May-41 bond.
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NZGBs closed flat to 2bps richer across benchmarks after dealing in narrow ranges in today’s local session. With the domestic calendar empty today, local participants largely sat on the sideline ahead of Wednesday’s RBNZ Policy Decision. 

  • However, swap rates closed 1-5bps higher with a flatter 2s10s curve.
  • RBNZ dated OIS pricing closed 4-20bps firmer across 2025 meetings.
  • For Wednesday's RBNZ Policy Decision, the market is pricing in a 74% chance (44bps) of a 50bp cut, with 88bps of easing by year-end.
  • Tomorrow, the local calendar is empty.
  • We have limited US data today, with the focus on the minutes for the September FOMC tomorrow, CPI on Thursday and PPI on Friday. Note, that Friday also sees the start of the latest earnings cycle with Bank of NY Mellon, Wells Fargo, JP Morgan and Blackrock announcing.
  • Cash US tsys are 2-5bps richer, with a steepening bias, in today’s Asia-Pac session after Fed's Musalem stated that the current monetary policy path remains appropriate despite recent jobs data.
  • On Thursday, the NZ Treasury plans to sell NZ$200mn of the 0.25% May-28 bond, NZ$250mn of the 4.25% May-34 bond and NZ$50mn of the 1.75% May-41 bond.