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NZGBS: Closed At Cheaps, Led By Short-End

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NZGBs closed at cheaps, underperforming its $-Bloc peers. NZGB supply appeared to weigh relatively on short-end pricing with yields 3bp higher post-auction versus unchanged to lower for longer-dated bonds. Cash benchmark yields closed 6-12bp higher with the 2/10 curve 6bp flatter.

  • Swaps weaken through the session to close with rates 7-9bp higher, implying tighter short-end but wider long-end swap spreads.
  • On the local data front, building consents printed a weak -9.0% M/M in February after a downwardly revised -5.2% in January. The ANZ Business Confidence Survey, however, delivered a modestly more favourable message of slightly improved confidence and lower inflationary pressures. For the RBNZ, today’s data shouldn’t move the dial with respect to next week’s rate decision.
  • RBNZ dated OIS closed 1-6bp firmer across meetings with April priced for a 25bp hike. Terminal OCR expectations firmed to 5.26%.
  • The Antipodean calendar is light until next week with Australian Private Sector Credit tomorrow as the highlight.
  • Further afield, regional European CPI data is out today ahead of the Eurozone CPI tomorrow. U.S. PCE deflator is also released tomorrow.
  • Until then, the market’s focus will be on risk appetite and equity indices, especially banking indices, to see if recent gains can be extended.
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NZGBs closed at cheaps, underperforming its $-Bloc peers. NZGB supply appeared to weigh relatively on short-end pricing with yields 3bp higher post-auction versus unchanged to lower for longer-dated bonds. Cash benchmark yields closed 6-12bp higher with the 2/10 curve 6bp flatter.

  • Swaps weaken through the session to close with rates 7-9bp higher, implying tighter short-end but wider long-end swap spreads.
  • On the local data front, building consents printed a weak -9.0% M/M in February after a downwardly revised -5.2% in January. The ANZ Business Confidence Survey, however, delivered a modestly more favourable message of slightly improved confidence and lower inflationary pressures. For the RBNZ, today’s data shouldn’t move the dial with respect to next week’s rate decision.
  • RBNZ dated OIS closed 1-6bp firmer across meetings with April priced for a 25bp hike. Terminal OCR expectations firmed to 5.26%.
  • The Antipodean calendar is light until next week with Australian Private Sector Credit tomorrow as the highlight.
  • Further afield, regional European CPI data is out today ahead of the Eurozone CPI tomorrow. U.S. PCE deflator is also released tomorrow.
  • Until then, the market’s focus will be on risk appetite and equity indices, especially banking indices, to see if recent gains can be extended.