NZGBs Back The Other Way

Cash NZGB yields have shifted ~10bp lower after U.S. Tsys richened on Tuesday, reversing the bulk of yesterday’s cheapening.

• Early Wednesday hours bought news from the Treasury that the new green NZGB May-34 will launch next week (sized at NZ$2-3bn).
• RBNZ dated OIS is softer at the margin, in sympathy with the above move, as terminal OCR pricing comes in a touch to just below 5.40% after printing at ~5.45% late yesterday. ~70bp of tightening is still priced for this month’s meeting, marginally softer than rates which prevailed late yesterday.
• Local data has seen another uptick in card spending (M/M), although the rate of growth moderated in both total and retail spending.
• U.S. midterm election results will be eyed as we work through the session.
• Looking ahead, Thursday will see the release of the RBNZ’s Review and Assessment of the Formulation and Implementation of Monetary Policy, with manufacturing PMI data and the weekly round of NZGB issuance also slated.