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NZGB WGBI-Induced Impetus Fades

BONDS

NZGBS have been subjected to a parallel ~8bp of cheapening across the curve early today, after wider core global FI markets experienced bear flattening pressure on Monday. A reminder that NZGBs outperformed on Monday, aided by the impending (and now realised) FTSERussell WGBI inclusion.

  • Swap spreads are marginally narrower across the curve after yesterday’s WGBI-induced widening, as swap rates rise by ~7bp across the curve.
  • RBNZ dated OIS is little changed this morning, with 70bp of tightening priced for this month’s meeting and a terminal OCR of ~5.20% still priced.
  • Today’s domestic data docket is headlined by the already released building permits reading which saw an uptick in M/M terms after last month’s fall.
  • Participants will be on the lookout for any trans-Tasman impetus from the last RBA monetary policy decision later today, with that decision providing the major risk event during Asia-Pac hours.
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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