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BONDS: NZGB Curve Bear-Steepens, 2yr Yield Holds Steady

BONDS
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NZGBs bear-steepened throughout the session with yields closing near session highs. The moves largely track those made overnight US tsys, while the stronger-than-expected AU employment data may have also contributed to higher yields.

  • Data calendar locally was quiet with just card spending remaining flat in November, following a revised 0.7% increase in October. Total card spending declined 0.1% m/m after a revised 0.2% gain previously. Fuel outlet sales rose 1.3% m/m, while core sales edged up 0.1% m/m.
  • We did have some bond auctions today with NZ$500m raised across three tenors. NZ$250m NZGB 0.25% 15 May 2028, saw a bid/cover ratio of 3.162, up from 2.45 prior with an average yield of 3.8120%. NZ$225m NZGB 4.50% 15 May 2035 saw a bid/cover lower than prior coming in at 2.11 vs 2.28, with a average yields of 4.4637 and finally we had NZ$25m 2.75% 15 Apr 2037 with a bid/cover of 3.72, up from 2.82 prior, with a average yield of 4.6445%.
  • Earlier ANZ stated they expected New Zealand's economy to contract by 0.4% in Q3, exceeding the central bank's and ANZ's earlier projections of a 0.2% decline, reflecting the impact of prior rate hikes on activity. NZ GDP is due out On December 19th.
  • NZGBs yields closed -0.2bps to +6.6bps with the curve bear-steepening. The 2yr closed -0.2bps at 3.711%, holding near yearly lows, while the 10yr closed +5.9bps 4.372%
  • The RBNZ dated OIS was steady throughout the session with 43bps of cuts priced in for the Feb meeting, and a cumulative 109bps of cuts priced in through to October 2025.
  • Tomorrow we have November BusinessNZ Manufacturing PMI data
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NZGBs bear-steepened throughout the session with yields closing near session highs. The moves largely track those made overnight US tsys, while the stronger-than-expected AU employment data may have also contributed to higher yields.

  • Data calendar locally was quiet with just card spending remaining flat in November, following a revised 0.7% increase in October. Total card spending declined 0.1% m/m after a revised 0.2% gain previously. Fuel outlet sales rose 1.3% m/m, while core sales edged up 0.1% m/m.
  • We did have some bond auctions today with NZ$500m raised across three tenors. NZ$250m NZGB 0.25% 15 May 2028, saw a bid/cover ratio of 3.162, up from 2.45 prior with an average yield of 3.8120%. NZ$225m NZGB 4.50% 15 May 2035 saw a bid/cover lower than prior coming in at 2.11 vs 2.28, with a average yields of 4.4637 and finally we had NZ$25m 2.75% 15 Apr 2037 with a bid/cover of 3.72, up from 2.82 prior, with a average yield of 4.6445%.
  • Earlier ANZ stated they expected New Zealand's economy to contract by 0.4% in Q3, exceeding the central bank's and ANZ's earlier projections of a 0.2% decline, reflecting the impact of prior rate hikes on activity. NZ GDP is due out On December 19th.
  • NZGBs yields closed -0.2bps to +6.6bps with the curve bear-steepening. The 2yr closed -0.2bps at 3.711%, holding near yearly lows, while the 10yr closed +5.9bps 4.372%
  • The RBNZ dated OIS was steady throughout the session with 43bps of cuts priced in for the Feb meeting, and a cumulative 109bps of cuts priced in through to October 2025.
  • Tomorrow we have November BusinessNZ Manufacturing PMI data