NZGBS: Cheaper, Consumer Confidence Nudges Higher in Q2

NZGBs are trading 4bp cheaper in early local trading after a subdued start to the week with the US observing the Juneteenth Day holiday. Risk appetite was softer with the market seemingly disappointed on the lack of any announcement on a Chinese stimulus package following a State Council meeting. US tsy futures weakened in line with UK and European bonds with the 2-year Gilt yield 14bp higher ahead of the BoE policy decision on Thursday.

• Swap rates are 2bp higher with implied swap spreads narrower.
• RBNZ dated OIS pricing is 1-4bp firmer for meetings beyond October with May-24 leading.
• Consumer confidence edged higher in the three months through June, according to the Westpac McDermott Miller index. The index rises to 83.1 from 77.7 in Q1 and 75.6 in Q4, a record low. Signs of a peak in interest rates and a base for the housing market suggest sentiment could improve further in coming months, but Q2 confidence “remains in the doldrums”.
• The domestic data calendar is empty for the remainder of the session.
• In Australia, today the key event is the release of the RBA Board Meeting Minutes. At their June meeting, the Board unexpectedly increased the cash rate by a further 25bp to take the cash rate target to 4.1%.