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BONDS: NZGBS: Cheaper, US Markets Swings With Headlines

BONDS
BulletMarketsFixed Income Bullets

In local morning trade, NZGBs are 2-3bps cheaper, reflecting the modest twist-steepening observed in US tsys at the close of the NY session. Notably, US yields ended the session higher than the levels seen at yesterday’s local close. 

  • US markets remain sensitive to headline risk, with stocks and rates selling off after early headlines reported Trump is considering declaring a state of emergency to enact universal tariffs (opposite reaction from Monday's early rally on WAPO article that suggested a watered down tariff plan).
  • Rates and stocks bounced after Fed Gov Waller argued for further rate cuts if the economy unfolds as expected, while adding he doesn't see tariffs as being inflationary.
  • Risk sentiment cooled slightly after the December FOMC minutes underscored a shift toward a slower pace in cutting rates citing rising upside risks to inflation and elevated uncertainty over potential changes in trade and immigration policy.
  • Swap rates are 1-2bps higher.
  • RBNZ dated OIS pricing is little changed. 51bps of easing is priced for February, with a cumulative 125bps by November 2025.
  • The local calendar is empty for the rest of the week. The next data release is Monday, with Building Permits and Filled Jobs on tap. 
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In local morning trade, NZGBs are 2-3bps cheaper, reflecting the modest twist-steepening observed in US tsys at the close of the NY session. Notably, US yields ended the session higher than the levels seen at yesterday’s local close. 

  • US markets remain sensitive to headline risk, with stocks and rates selling off after early headlines reported Trump is considering declaring a state of emergency to enact universal tariffs (opposite reaction from Monday's early rally on WAPO article that suggested a watered down tariff plan).
  • Rates and stocks bounced after Fed Gov Waller argued for further rate cuts if the economy unfolds as expected, while adding he doesn't see tariffs as being inflationary.
  • Risk sentiment cooled slightly after the December FOMC minutes underscored a shift toward a slower pace in cutting rates citing rising upside risks to inflation and elevated uncertainty over potential changes in trade and immigration policy.
  • Swap rates are 1-2bps higher.
  • RBNZ dated OIS pricing is little changed. 51bps of easing is priced for February, with a cumulative 125bps by November 2025.
  • The local calendar is empty for the rest of the week. The next data release is Monday, with Building Permits and Filled Jobs on tap.