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NZGB Cheapening Extends Further

BONDS

Spill over from Wednesday’s move higher in Tsy yields & hawkish Fed repricing, as well as some pre-NZGB auction concession, have combined to weigh on NZGBs in early Thursday trade, with the major benchmarks running 10-15bp cheaper as the curve bear flattens.

  • Meanwhile, swap rates across the term structure are ~10bp higher this morning, leading to mixed swap spread performance.
  • Terminal OCR pricing observed in RBNZ dated OIS is incrementally higher today, holding above 5.40%, with 83bp of tightening priced for next month’s meeting.
  • Thursday’s domestic docket is headlined by the weekly round of NZGB issuance, with May-28, Apr-33 and May-51 paper set to come to market.
  • Elsewhere, trans-Tasman spill over from the latest Australian labour market report and the latest round of monthly LPR fixings out of China will be eyed.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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