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NZGBS: Cheaper, Spillover Selling From ACGBs & US Tsys, Local Market Closed Tomorrow

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NZGBs closed cheaper but in the middle of today’s ranges, with yields 3-4bps higher across benchmarks. After opening weaker, the market cheapened further via spillover selling from ACGBs after Q1 CPI data printed higher than expected across all measures. ACGBs are currently dealing 9-13bps cheaper after the data.

  • Cheaper US tsys in today’s Asia-Pacific session also likely weighed on the local market. Cash US tsys are dealing 1-2bps cheaper, with a slight flattening bias.
  • There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined Trade Balance data.
  • Solid demand metrics at today’s weekly supply, brought forward from its normal Thursday slot due to tomorrow's holiday, likely assisted the move away from session cheaps. The cover ratios for the Apr-29 and May-34 lines, 1.96x and 4.16x respectively, improved versus the previous outings.
  • Swap rates closed 4-5bps higher, with the 2s10s curve steeper.
  • RBNZ dated OIS pricing closed 1-3bps firmer for meetings beyond May, with Nov-24 leading. A cumulative 51bps of easing is priced by year-end.
  • Tomorrow, the NZ and Australian markets are closed for the ANZAC day holiday.
  • Later today, the US calendar will see Durable/Capital Goods and Tsy Auctions. PCE Deflator data is due on Friday.
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NZGBs closed cheaper but in the middle of today’s ranges, with yields 3-4bps higher across benchmarks. After opening weaker, the market cheapened further via spillover selling from ACGBs after Q1 CPI data printed higher than expected across all measures. ACGBs are currently dealing 9-13bps cheaper after the data.

  • Cheaper US tsys in today’s Asia-Pacific session also likely weighed on the local market. Cash US tsys are dealing 1-2bps cheaper, with a slight flattening bias.
  • There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined Trade Balance data.
  • Solid demand metrics at today’s weekly supply, brought forward from its normal Thursday slot due to tomorrow's holiday, likely assisted the move away from session cheaps. The cover ratios for the Apr-29 and May-34 lines, 1.96x and 4.16x respectively, improved versus the previous outings.
  • Swap rates closed 4-5bps higher, with the 2s10s curve steeper.
  • RBNZ dated OIS pricing closed 1-3bps firmer for meetings beyond May, with Nov-24 leading. A cumulative 51bps of easing is priced by year-end.
  • Tomorrow, the NZ and Australian markets are closed for the ANZAC day holiday.
  • Later today, the US calendar will see Durable/Capital Goods and Tsy Auctions. PCE Deflator data is due on Friday.