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NZGBs Cheaper, RBNZ Survey Shows Household Inflation Expectation Falls

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NZGBs are flat to 1.5bps cheaper today, the curve has bear steepened. It has been a slow day, RBNZ published Q2 household expectations survey earlier with the two-year inflation expectation now at 3% down from 3.2% in Q1, otherwise the market will be waiting for the RBNZ rate decision on Wednesday were they are widely expected to keep rates on hold.

  • US treasury futures are slightly higher in Asia trading, the 10Y contract is (+ 01) at 109-07, after earlier making highs of 109-09, while volumes are on the low side, yields are about 1bp lower across the curve. In tsys flows there was earlier a block seller of FV, and a likely buyer of 20k TY Jun 24 110 calls.
  • The NZGB curve is steeper, but trading near session best at the moment, the 2Y +0.5bps at 4.674%, 10Y is +1.0bps at 4.596%.
  • Earlier, The RBNZ's 2Q household expectations survey shows a decrease in the median expected inflation rate for the next two years to 3% from 3.2% in 1Q, and for the next year to 4% from 5%. The median expected inflation in five years remains at 3%. The mean expected inflation in two years is unchanged at 3.6%. Additionally, 52% of respondents expect higher house prices, with the median expected house price inflation in one year at 0%.
  • Swap rates are flat to 1bps lower
  • RBNZ dated OIS is slightly today today down 2bps heading into year-end with cumulative 47bps of easing now.
  • Looking Ahead: RBNZ on Wednesday
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NZGBs are flat to 1.5bps cheaper today, the curve has bear steepened. It has been a slow day, RBNZ published Q2 household expectations survey earlier with the two-year inflation expectation now at 3% down from 3.2% in Q1, otherwise the market will be waiting for the RBNZ rate decision on Wednesday were they are widely expected to keep rates on hold.

  • US treasury futures are slightly higher in Asia trading, the 10Y contract is (+ 01) at 109-07, after earlier making highs of 109-09, while volumes are on the low side, yields are about 1bp lower across the curve. In tsys flows there was earlier a block seller of FV, and a likely buyer of 20k TY Jun 24 110 calls.
  • The NZGB curve is steeper, but trading near session best at the moment, the 2Y +0.5bps at 4.674%, 10Y is +1.0bps at 4.596%.
  • Earlier, The RBNZ's 2Q household expectations survey shows a decrease in the median expected inflation rate for the next two years to 3% from 3.2% in 1Q, and for the next year to 4% from 5%. The median expected inflation in five years remains at 3%. The mean expected inflation in two years is unchanged at 3.6%. Additionally, 52% of respondents expect higher house prices, with the median expected house price inflation in one year at 0%.
  • Swap rates are flat to 1bps lower
  • RBNZ dated OIS is slightly today today down 2bps heading into year-end with cumulative 47bps of easing now.
  • Looking Ahead: RBNZ on Wednesday