NZGBS: Closed Cheaper But Off Worst Levels, May-35 Bond Syndication Launch

NZGBs closed 5-6bps cheaper but well off the session’s worst levels. In the absence of domestic drivers, the local market has moved away from cheaps in line with US tsys in today’s Asia-Pac session. Cash US tsys are dealing 1-2bps richer across benchmarks.

• RBNZ raised its foreign currency intervention capacity to NZ$20b at the end of February.
• Swap rates closed 2-4bps cheaper, with the 2s10s curve steeper.
• RBNZ dated OIS pricing is flat to 3bps firmer across meetings, with Feb-25 leading. A cumulative 68bps of easing is priced by year-end.
• Tomorrow, the local calendar sees the NZ Government Budget Policy Statement at 13:00 NZT.
• NZ Treasury has appointed ANZ Bank, Bank of New Zealand, UBS, and Westpac as joint lead managers for the formation of the panel responsible for syndicating the May 2035 nominal bond. The Treasury anticipates launching this transaction before the conclusion of April, pending favourable market conditions. Consistent with standard procedure, should the syndication proceed, the scheduled bond tender for the corresponding week will be cancelled.