NZGBS: Cheaper But Off Cheaps, Net Migration Data Tomorrow

NZGBs closed 5-7bps cheaper, with the 2/10 curve steeper. NZGBs finished stronger than their worst levels in sympathy with a slight paring of yesterday’s sell-off in short-end US tsys in today’s Asia-Pac session. Cash US tsys are flat to 3bps richer across benchmarks, with a steepening bias.

• There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined Retail Card Spending, REINZ House Sales and Food Prices data. The domestic data drop, as expected, failed to be a market-mover.
• Swap rates closed 4-6bps higher, with the 2s10s curve steeper.
• RBNZ dated OIS pricing is 2-9bps firmer, with November leading. A cumulative easing of 44bps is priced for year-end from a peak of 5.66%. This compares to 100bps of easing off 5.53% at the end of January.
• (Bloomberg) -- NZ’s residential construction market was weaker than expected in the six months through December and is likely to remain that way, Fletcher Building said in a presentation. (See link)
• Tomorrow, the local calendar sees the NZ Government’s 6-Month Financial Statements and Net Migration data.
• Tomorrow, the NZ Treasury plans to sell NZ$275mn of the 4.5% Apr-27 bond, NZ$150mn of the 3.5% Apr-33 bond and NZ$75mn of the 2.75% May-51 bond.