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NZGBS Cheaper, But A Bit More Contained Than What Has Been Seen Elsewhere

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A fairly sedate (in relative terms) start for the NZGB space after the elongated holiday weekend, with yields running 7.0-10.5bp higher across the curve, with 10s leading the weakness.

  • These moves are by no means small in isolation, but when you account for the scale of the moves observed in global core FI markets since Friday’s local close it gives you some perspective.
  • RBNZ OIS still price a terminal rate of ~4.75%, little changed vs. that seen late Friday.
  • Note that early Tuesday comments from RBNZ Governor Orr reiterated the idea that the Bank still has some work to do, but he did note that the tightening cycle is “already very mature.” A reminder that the peak in the Bank’s OCR track currently stands at ~4.10% (per the most recent MPS).
  • TD securities have become the latest to up their RBNZ terminal rate view (to 4.50%, flagging upside risks).
  • With Orr’s speech out of the way we now face a relatively empty domestic docket over the next couple of sessions. Thursday will see the release of the latest ANZ business survey, while Friday will see the same collator present its consumer confidence readings. These are the last key data releases that will cross ahead of next week’s RBNZ decision, with markets pricing ~53-54bp of tightening for that event.
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A fairly sedate (in relative terms) start for the NZGB space after the elongated holiday weekend, with yields running 7.0-10.5bp higher across the curve, with 10s leading the weakness.

  • These moves are by no means small in isolation, but when you account for the scale of the moves observed in global core FI markets since Friday’s local close it gives you some perspective.
  • RBNZ OIS still price a terminal rate of ~4.75%, little changed vs. that seen late Friday.
  • Note that early Tuesday comments from RBNZ Governor Orr reiterated the idea that the Bank still has some work to do, but he did note that the tightening cycle is “already very mature.” A reminder that the peak in the Bank’s OCR track currently stands at ~4.10% (per the most recent MPS).
  • TD securities have become the latest to up their RBNZ terminal rate view (to 4.50%, flagging upside risks).
  • With Orr’s speech out of the way we now face a relatively empty domestic docket over the next couple of sessions. Thursday will see the release of the latest ANZ business survey, while Friday will see the same collator present its consumer confidence readings. These are the last key data releases that will cross ahead of next week’s RBNZ decision, with markets pricing ~53-54bp of tightening for that event.