NZGBS: Cheaper To Start, Focus On Global Matters

NZGB yields start the week higher, in sympathy with Friday’s moves in wider core global FI markets, with a parallel ~6bp of cheapening observed. Swap rates are 6-7bp higher across the major benchmarks, with a modest steepening bias observed on that curve, leaving swap spreads flat to marginally wider.

• RBNZ dated OIS continues to show a circa 50/50 chance of the RBNZ moving in a 75bp step next month, after nearly fully pricing in such a move earlier this month. Terminal OCR pricing continues to hover around the 5.45% mark.
• Local news flow has been limited over the weekend, which will leave global cues at the fore to start the week.
• We haven’t had much in the way of meaningful macro news flow over the weekend, outside of China marking its COVID-19 death toll notably higher. With cash Tsys closed owing to the observance of a holiday in the U.S most of the Asia-Pac focus will fall on BoJ speculation and resultant moves in JGBs.
• The local docket is empty today. Further out, this week’s domestic highlights include REINZ house price data, card spending readings, non-resident bond holdings and the latest manufacturing PMI survey.