NZGBS: Cheaper, 10-Year US Tsy Yield Hits 3-Mth High

In early local trade, NZGBs are 5bp cheaper after the US tsy curve bear steepened with the 10-year yield finishing 8bp higher and the 2-year close to flat. The 10-year yield made a fresh 3-month high of 3.95%, before finishing at 3.93%. This move came prior to the release of the FOMC minutes of the June meeting.

• There was little reaction to the minutes with no surprises. "Almost all participants noted that in their economic projections that they judged that additional increases in the target federal funds rate during 2023 would be appropriate," the report said. “Some participants indicated that they favoured raising the target range for the federal funds rate 25 basis points at this meeting or that they could have supported such a proposal.”
• Swap rates are 6-7bp higher.
• RBNZ dated OIS pricing is little changed for meetings out to Feb’24.
• The local calendar light for the remainder of the week.
• In Australia, the calendar sees the release of the May Trade Balance with a resilient export performance expected.
• Today the NZ Treasury plans to sell NZ$250mn of the 0.5% 15 May 2026 bond, NZ$200mn of the 2.0% 15 May 2032 bond and NZ$50mn of the 1.75% 15 May 2041 bond.