NZGBS: Bid In Wake Of ECB & BoE

NZGB yields move lower in sympathy with the shifts in EGB & UK yields on Thursday, with investors turning their focus to the end of the BoE and ECB tightening cycles in lieu of the latest decisions from both central banks, owing to guidance and post-meeting rhetoric.

• That leaves the major NZGB benchmarks running ~7bp richer across the curve, extending yesterday’s rally, while swap rates are 7-8bp lower, also in a somewhat parallel shift, leaving swap spreads little changed.
• RBNZ dated OIS comes in on the back of the impetus derived from the European central banks, leaving 51 bp of tightening priced for next month’s meeting, alongside pricing of a terminal OCR of ~5.20%.
• ANZ-Roy Morgan consumer confidence data has been and gone, with the survey collator noting that “consumer confidence jumped 9 points in January to 83.4, more than undoing its December fall. The lift was driven by the forward-looking questions. The level is still very low.”
• The spectre of Friday’s NFP print out of the U.S. could limit wider activity during Asia-Pac hours, although adjustments to the aforementioned central bank decisions may provide some intraday impetus.