NZGBS: Cheaper, US Tsys Pressured By Retails Sales, NZDM Issuance Re-Starts Today

In local morning trade, NZGBs are 4-6bps cheaper after global bond yields shunted higher as investors trimmed expectations for rate cuts by the major central banks. US tsys bear-flattened, with yields 2-14bps higher, after US Retail Sales printed stronger than expected in December. The control group, which feeds into GDP, was the clear standout, jumping 0.76% m/m (cons 0.2%) after a slightly upward revised 0.47% (initial 0.40%).

• Industrial Production also fared slightly better than expected in December, rising 0.05% m/m (cons -0.1%) but the beat was offset by a downward revised 0.0% m/m (initial 0.2%) in Nov.
• Swap rates are 6-8bps higher, with the 2s10s curve flatter.
• RBNZ dated OIS pricing is 1-2bps firmer across meetings. A cumulative 97bps of easing is priced by year-end.
• REINZ Home Sales rose 14.1% y/y in December, with a median time to sell a house at 36 days, the lowest since March 2022 and down from a peak of 60 days in February last year.
• Food Prices rose 4.8% y/y in December from 6% pace in November.
• Today, NZ Debt Management restarts tendering of NZGBs after its summer break, with a planned sale of NZ$275mn of the 0.25% May-28 bond, NZ$175mn of the 3.5% Apr-33 bond and NZ$50mn of the 2.75% Apr-37 bond.