NZGBS: Cheaper, Subdued Start To The Week, Q3 GDP On Thursday

NZGBs closed flat to 3bps cheaper, with the 2/10 curve steeper, after a subdued start to the week. With the domestic calendar empty today, local participants have likely eyed US tsys in today’s Asia-Pac session for guidance after Friday’s post-payrolls sell-off.

• US tsys are holding cheaper in the Asia-Pac session so far, however, ranges have been narrow, and the downtick has not yet followed through. Friday's post-payroll lows remain intact. Little meaningful macro newsflow has crossed today. Cash tsys sit ~1bps cheaper across the major benchmarks.
• Bloomberg has reported that the NZ Treasury said that stripping the RBNZ of its dual mandate and returning it to a single focus on price stability may improve its effectiveness by influencing inflation expectations. (See link)
• Economists see 2023-24 annual average GDP growth of 1.2% versus 0.4% in the September survey, according to the latest NZIER survey.
• Swap rates are 1-2bps higher, with the short-end implied swap spread wider.
• RBNZ dated OIS pricing is slightly mixed across meetings.
• Tomorrow, the local calendar sees Card Spending Retail and Net Migration data. However, the highlight of the local docket this week is likely to be Q3 GDP on Thursday. A rise of 0.2% q/q is expected.