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NZGBS: Cheaper But Outperforms Its $-Bloc Counterparts

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NZGBs closed on a soft note, with benchmark yields 6-7bps higher. With the domestic calendar empty today, the local market has tracked US tsys’ cheapening in today’s Asia-Pac session.

  • Cash US tsys are 2-4bps cheaper across benchmarks, with a steepening bias, as the market continues to pare the rally instigated by Israel’s attack on Iran on Friday.
  • Nevertheless, the NZGB 10-year has outperformed its $-bloc counterparts, with the NZ-US and NZ-AU 10-year yield differentials 4bps and 2bps tighter, respectively.
  • Swap rates closed 6-7bps higher, with the 2s10s curve steeper.
  • RBNZ dated OIS pricing closed is 5-11bps firmer for meetings beyond July, with late-2024/early-2025 leading. A cumulative 49bps of easing is priced by year-end.
  • The local calendar is empty until Trade Balance data on Wednesday. Also on Wednesday, Australia will release Q1 CPI data.
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NZGBs closed on a soft note, with benchmark yields 6-7bps higher. With the domestic calendar empty today, the local market has tracked US tsys’ cheapening in today’s Asia-Pac session.

  • Cash US tsys are 2-4bps cheaper across benchmarks, with a steepening bias, as the market continues to pare the rally instigated by Israel’s attack on Iran on Friday.
  • Nevertheless, the NZGB 10-year has outperformed its $-bloc counterparts, with the NZ-US and NZ-AU 10-year yield differentials 4bps and 2bps tighter, respectively.
  • Swap rates closed 6-7bps higher, with the 2s10s curve steeper.
  • RBNZ dated OIS pricing closed is 5-11bps firmer for meetings beyond July, with late-2024/early-2025 leading. A cumulative 49bps of easing is priced by year-end.
  • The local calendar is empty until Trade Balance data on Wednesday. Also on Wednesday, Australia will release Q1 CPI data.