NZGB Yields Higher Despite Light Global Richening, Local Issuance Weighs

NZGB yields have drifted higher this morning, running 2-3bp higher across the major benchmarks. This is despite a modest richening trend in core global FI markets since yesterday’s close, with the impending pricing of the new green NZGB May-34 the likely idiosyncratic source of pressure.

• Note that demand for the bond has been “strong,” with guidance tightened to the bottom of the initial range.
• The steepening of the swap curve has resulted in mixed swap spread performance (for a second consecutive day).
• Terminal OCR pricing continues to hover between 5.00-5.10% in RBNZ dated OIS.
• Local news flow has seen REINZ house price data pull lower again as the housing market continues to adjust to the rapidly increasing interest rate environment.