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Closed Slightly Weaker, Focus Abroad

BONDS

NZGBs closed 1-3bps cheaper, at session worst levels, with the 2/10 curve steeper. With the local calendar empty today, local participants have been guided from abroad ahead of this week's policy meetings for the BOJ (tomorrow), FOMC (Wednesday) and the BOE (Thursday). Although no substantial changes in policy are anticipated at these meetings, their potential to influence the market still looms large. Notably, there is a level of uncertainty surrounding the possibility of the BOJ making further adjustments to its yield curve control.

  • Cash US tsys are 3-4bps cheaper so far in the Asia-Pac session. There has been little by way of newsflow today.
  • Swap rates closed with a twist-steepening, rates 1bp lower to 2bps higher.
  • RBNZ dated OIS pricing closed little changed across meetings, with terminal OCR expectations at 5.61%.
  • Tomorrow, the local calendar sees Building Permits and ANZ Business Confidence.
  • The US calendar sees the US Treasury's quarterly borrowing estimates later today. Wednesday sees the FOMC policy announcement along with ADP Private Employment data, ahead of Friday’s Non-Farm payrolls.

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