Free Trial

NZGBS: Cheaper After US Payrolls Spark A Sell-Off In US Tsys

BONDS

In local morning trade, NZGBs are flat to 3bps cheaper, with the 2/10 curve steeper, after US tsys cheapened on the back of a slightly stronger than expected Change in Nonfarm Payrolls (+199k vs. 183k est, +150k prior). The change in Private Payrolls was softer (+150k vs.158k est, 99k prior) but the Unemployment Rate dipped to 3.7% vs. 3.9% est.

  • US tsy yields gapped higher on the data but quickly scaled back as the market digested the down-revisions to prior and unrounded releases. The 2-year rate finished 13bps cheaper at 4.72%, while the 10-year yield increased 8bps to 4.23%.
  • Average hourly earnings growth (+0.4% m/m vs. +0.3% est. & +0.2% prior) was also hotter than expected.
  • Swap rates are 3-4bps higher, with the short-end implied swap spread wider.
  • RBNZ dated OIS pricing is slightly firmer across meetings.
  • The latest BusinessNZ Planning Forecast shows business confidence is increasing, but NZ’s economic growth is still expected to be relatively low out to December 2025. (See link)
  • Today, the local calendar is light, ahead of Card Spending Retail and Net Migration data tomorrow. The highlight of the local docket this week is Q3 GDP on Thursday, a rise of 0.2% Q/Q is expected.

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.