MNI China Daily Summary: Wednesday, December 11

MNI BRIEF: Chinese Rail Passenger Numbers Break Record

MNI: PBOC Net Injects CNY37.3 Bln via OMO Wednesday

MNI: PBOC Sets Yuan Parity Lower At 7.1843 Weds; -1.22% Y/Y

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CORRECTED-MNI BRIEF: Brazil Inflation Rises To 4.87% In Nov

EZ/UK Bond Supply Calendar: 4.25% Jul-34 Gilt Due Wednesday

EZ/UK T-Bill Calendar: 12-Month BOT Auction on Wednesday

MNI: JAPAN NOV CORP GOODS PRICE INDEX +3.7% Y/Y; OCT REV +3.6%

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

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BONDS: NZGBS Trade Richer As US Rate Cut Pricing Firms

BONDS
BulletMarketsFixed Income Bullets

NZGBs are richer today curves have steepened over the week although slightly flattened over the day. Earlier today we saw August House prices fall, while BusinessNZ Mfg PMI rose slightly.

  • Ex-NY Fed Pres Dudley sees a strong case for a half-point rate cut at the FOMC meeting, citing a weakening U.S. labor market and risks to jobs outweighing inflation concerns. While most expect a quarter-point cut, Dudley emphasized Powell's reluctance to allow further labor market weakness, and noted that some Wall Street banks, like Citigroup and JPMorgan, are pushing for more aggressive action.
  • US tsys futures have edged higher and now trade near session's best. The US 10yr yield is trading at yearly lows of 3.644%, while the US 2s10s curve is +2.833 at 5.894, just off recent highs of 7.405.
  • NZGBs yields are 4-5bps lower across the curve, with the 2yr -4.1bps at 3.861%, the lowest since Sept 2022, while the 10yr is trading -4.7bps at 4.088% back at may 2023 levels.
  • Swap rates are 3-6bps lower
  • RBNZ dated OIS continues to fluctuate with pricing firming 2-3bps into year-end, with 37.5bps of cuts priced in for October. Pricing has firmed 5-10bps through to the July meeting.
  • NZ Houses are taking longer to sell, with the median time reaching 50 days in August, the highest since April 2023 with house prices flat in August after five months of declines, annual prices dropped 0.7%. While NZ Mfg PMI rose to 45.8 in August from 44.4 in July, marking the 18th consecutive month of contraction, though improving from a low of 41.4 in June.
  • The calendar is empty until Thursday when GDP is due out, with consensus expected to show a 0.5% drop for Q2. 
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NZGBs are richer today curves have steepened over the week although slightly flattened over the day. Earlier today we saw August House prices fall, while BusinessNZ Mfg PMI rose slightly.

  • Ex-NY Fed Pres Dudley sees a strong case for a half-point rate cut at the FOMC meeting, citing a weakening U.S. labor market and risks to jobs outweighing inflation concerns. While most expect a quarter-point cut, Dudley emphasized Powell's reluctance to allow further labor market weakness, and noted that some Wall Street banks, like Citigroup and JPMorgan, are pushing for more aggressive action.
  • US tsys futures have edged higher and now trade near session's best. The US 10yr yield is trading at yearly lows of 3.644%, while the US 2s10s curve is +2.833 at 5.894, just off recent highs of 7.405.
  • NZGBs yields are 4-5bps lower across the curve, with the 2yr -4.1bps at 3.861%, the lowest since Sept 2022, while the 10yr is trading -4.7bps at 4.088% back at may 2023 levels.
  • Swap rates are 3-6bps lower
  • RBNZ dated OIS continues to fluctuate with pricing firming 2-3bps into year-end, with 37.5bps of cuts priced in for October. Pricing has firmed 5-10bps through to the July meeting.
  • NZ Houses are taking longer to sell, with the median time reaching 50 days in August, the highest since April 2023 with house prices flat in August after five months of declines, annual prices dropped 0.7%. While NZ Mfg PMI rose to 45.8 in August from 44.4 in July, marking the 18th consecutive month of contraction, though improving from a low of 41.4 in June.
  • The calendar is empty until Thursday when GDP is due out, with consensus expected to show a 0.5% drop for Q2.