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NZGBS: Cheaper, US Tsys Pressured By Consumer Confidence & Poor 2Y & 5Y Auctions

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In local morning trade, NZGBs are 7bps cheaper after US tsys were pressured by stronger-than-expected Conference Board Consumer Confidence (despite a weak labour differential) and then sizeable tails for 2Y and 5Y auctions. The bid-to-cover metrics were the lowest since Nov’21 and Feb’21 respectively.

  • Fed Kashkari (non-voter) said he doesn’t think anyone has taken rate increases off the table, although he sees the odds of a hike as quite low.
  • The curve steepened with yields 3-9bps higher. The US 10Y yield easily cleared 4.50% to finish at 4.55%, the highest since the May 3 payrolls report.
  • The markets now await Friday's US PCE inflation details for more direction.
  • Swap rates are 4-5bps higher, with the 2s10s curve steeper and implied swap spreads tighter.
  • RBNZ dated OIS pricing is little changed out to Feb-25 but 4-7bps firmer beyond. A cumulative 16bps of easing is priced by year-end.
  • The local calendar will see the ANZ Business Confidence & Activity Outlook Report today.
  • (Bloomberg) Finance Minister Willis will deliver her first budget on Thursday. (See link)
  • NZ Treasury has appointed joint lead managers (ANZ, BNZ, Citigroup and CBA) to form the panel for a syndicated tap of the existing May 2028 bond. The transaction is expected in June.
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In local morning trade, NZGBs are 7bps cheaper after US tsys were pressured by stronger-than-expected Conference Board Consumer Confidence (despite a weak labour differential) and then sizeable tails for 2Y and 5Y auctions. The bid-to-cover metrics were the lowest since Nov’21 and Feb’21 respectively.

  • Fed Kashkari (non-voter) said he doesn’t think anyone has taken rate increases off the table, although he sees the odds of a hike as quite low.
  • The curve steepened with yields 3-9bps higher. The US 10Y yield easily cleared 4.50% to finish at 4.55%, the highest since the May 3 payrolls report.
  • The markets now await Friday's US PCE inflation details for more direction.
  • Swap rates are 4-5bps higher, with the 2s10s curve steeper and implied swap spreads tighter.
  • RBNZ dated OIS pricing is little changed out to Feb-25 but 4-7bps firmer beyond. A cumulative 16bps of easing is priced by year-end.
  • The local calendar will see the ANZ Business Confidence & Activity Outlook Report today.
  • (Bloomberg) Finance Minister Willis will deliver her first budget on Thursday. (See link)
  • NZ Treasury has appointed joint lead managers (ANZ, BNZ, Citigroup and CBA) to form the panel for a syndicated tap of the existing May 2028 bond. The transaction is expected in June.