NZGBS: Cheaper With US Tsys Ahead Of Fed Chair Powell’s JH Speech

In local morning trade, NZGBs are 2bp cheaper after US tsy yields moved higher ahead of the keenly anticipated address by Fed Chair Powell at the Jackon Hole Summit.

• Rates and equities had earlier reacted positively (if delayed) to Philly Fed Harker telling MNI he is inclined to support holding interest rates at their current level at least through the end of the year and possibly longer.
• However, US tsys came back under pressure while stocks traded weaker after Boston Fed Collins urged keeping rates higher for longer. "I don't think it's helpful to say a preset path, we may need additional increments, and we may be very near a place where we can hold for a substantial amount of time," Collins said.
• Newsflow was light, but against a backdrop of jobless claims data, which continue to show ongoing US labour market resilience, US tsys finished 3-6bp cheaper across benchmarks. The curve was flatter.
• Swap rates are 1bp higher.
• RBNZ dated OIS pricing is 1-3bp firmer for meetings beyond Apr’24. Terminal OCR expectations sit at 5.64%.
• Today the local calendar is empty.