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NZGBS: Cheaper But Closed Near Best Levels, New May-35 Bond Priced Tomorrow

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NZGBs benchmarks closed 4-6bps cheaper but at or near the best levels. In the absence of domestic data, the local market’s move away from the morning cheaps has likely been linked to the strengthening in US tsys in today’s Asia-Pac session.

  • Cash US tsys are dealing flat to 2bps richer, with a steepening bias. This comes after a sharp post-ISM Mfg sell-off yesterday.
  • Swap rates closed 3-4bps higher after being 8-10bps higher earlier in the session.
  • RBNZ dated OIS pricing is flat to 3bps firmer across meetings, with Feb-25 leading. A cumulative 69bps of easing is priced by year-end.
  • Tomorrow, the local calendar is empty, apart from the pricing of the new 4.5% May-35 nominal bond that was launched today by the NZ Treasury.
  • NZ Treasury expects to issue at least NZ$3bn of the new bond, with a transaction cap of NZ$5bn. Initial price guidance is 4-8bps over the May-34 nominal green bond. JLM: ANZ, BNZ, UBS AG and Westpac. Given the timing of the launch, the weekly bond auction scheduled for April 4 has been cancelled.
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NZGBs benchmarks closed 4-6bps cheaper but at or near the best levels. In the absence of domestic data, the local market’s move away from the morning cheaps has likely been linked to the strengthening in US tsys in today’s Asia-Pac session.

  • Cash US tsys are dealing flat to 2bps richer, with a steepening bias. This comes after a sharp post-ISM Mfg sell-off yesterday.
  • Swap rates closed 3-4bps higher after being 8-10bps higher earlier in the session.
  • RBNZ dated OIS pricing is flat to 3bps firmer across meetings, with Feb-25 leading. A cumulative 69bps of easing is priced by year-end.
  • Tomorrow, the local calendar is empty, apart from the pricing of the new 4.5% May-35 nominal bond that was launched today by the NZ Treasury.
  • NZ Treasury expects to issue at least NZ$3bn of the new bond, with a transaction cap of NZ$5bn. Initial price guidance is 4-8bps over the May-34 nominal green bond. JLM: ANZ, BNZ, UBS AG and Westpac. Given the timing of the launch, the weekly bond auction scheduled for April 4 has been cancelled.