NZGBS: Closed On A Strong Note, FOMC Decision Later Today

NZGBs closed on a strong note, with benchmark yields 1-6bps lower, despite a mixed set of economic data releases.

• ANZ sentiment readings printed Business Confidence at 36.6 vs 33.2 prior, and Activity Outlook at 25.6 vs 29.3 prev.
• Job Ads fell 6.9% q/q in December, registering a sixth straight quarter decline.
• An extension of overnight strength in US tsys in today’s Asia-Pac session also likely assisted the local bid. Ahead of the FOMC decision later today, US tsys are ~1bp richer across benchmarks.
• Bloomberg reported that Finance Minister Willis commented in parliament that “the economy is at or near the bottom of the economic cycle”.
• The swaps curve has bull-flattened, with rates flat to 7bps lower.
• RBNZ dated OIS pricing flat to 4bps firmer across meetings, with August leading.
• RBNZ Governor Adrian Orr is scheduled to deliver a keynote speech on 16 February at the NZ Economics Forum. Mr Orr will speak about the changing drivers of inflation over the past couple of years and the shift from transitory to more stubborn underlying inflation.
• Tomorrow, the local calendar sees CoreLogic House Prices.
• Tomorrow, the NZ Treasury plans to sell NZ$250mn of the 4.5% May-30 bond, NZ$175mn of the 3.5% Apr-33 bond and NZ$75mn of the 2.75% May-51 bond.