NZGBs Cheaper On Catch Up, Although Losses Limited

NZGBs have reacted to the cheapening in the likes of U.S. Tsys since Friday’s local close, although the move in Tsys pared back from extremes into Friday’s early NY close. Also note that the scenes of COVID-related unrest observed across some of the major Chinese cities may be limiting the early cheapening

• The major NZGB benchmarks sit 2.5-4.5bp cheaper early today, with some bear flattening in play.
• RBNZ dated OIS continues to price just over 70bp of tightening for the Bank’s Feb ’23 meeting, while terminal rate pricing continues to hover just below 5.50%.
• There isn’t anything in the way of local data slated today, which will leave broader macro gyrations and any trans-Tasman impetus from RBA Governor Lowe’s latest address at the fore.
• Further out this week, the local docket will be headlined by the ANZ business survey, building permits, terms of trade and CoreLogic house price data.