NZGBS: Cheaper Ahead Of Tomorrow’s Fiscal Update, BoJ Delivered Few Surprises

NZGBs have closed flat to 2bps cheaper across benchmarks after trading within a relatively narrow ranges during today’s local session. Despite the trade balance outperforming expectations, it did not serve as a significant domestic market driver ahead of the BoJ Policy Decision, which stood out as the focal point for today's Asia-Pac session.

• In line with expectations, the BoJ decision revealed unchanged policy parameters. Nevertheless, the market exhibited a mild strengthening following the announcement, indicating that certain participants had positioned themselves for a potentially hawkish surprise. The market now awaits Governor Ueda’s press conference at 15:30 Japan time today. The local market was closed when JGB futures resumed trading after the BoJ decision.
• US tsys are dealing flat to 2bp cheaper in today’s Asia-Pac session despite the richening in JGBs.
• The swaps curve finished with a twist-flattening, with rates 4bps higher to 3bps lower.
• RBNZ dated OIS pricing closed 1-4bps firmer across meetings. 97bp of easing is still priced for Nov’24.
• Tomorrow, the local calendar sees the Half-Year Economic and Fiscal Update.