NZGBS: Cheaper, US Tsy Yields Higher After Solid US Payrolls

NZGBs opened 6-9bp cheaper following the lead from Us tsys in NY trade ahead of the weekend. Risk appetite rebounded as US equities made strong gains following the release of data showing solid job growth.

• In April, US non-farm payrolls increased by 253k, which was approximately 70k more than anticipated. However, the net revisions over the previous two months were a negative 149k.
• The panic selling of US regional banking stocks earlier in the week was replaced by a substantial short-covering rally, causing the KBW banking index to increase by over 4.5%.
• US Treasury yields saw an increase, led by the short end, which resulted in a reduction of the expected ease in Fed policy for the second half.
• Swap rates opened 7bp higher with implied short-end swap spreads tighter.
• RBNZ dated OIS opened with pricing 1-3bp firmer across meetings. 24bp of tightening is priced for the May 24 meeting.
• The local calendar is light today ahead of Retail Card Spending tomorrow.
• Australia sees the release of NAB Confidence (Apr) and Building Approvals (Mar) ahead of the Federal Budget tomorrow.
• The Asian local is also light with Japan’s Nikkei Services PMI as the highlight.