NZGBS: Closed On A Weak Note

NZGBs closed on a weak note, with benchmark yields 1-5bps cheaper and the 2/10 curve steeper. The local highlight today was a speech from RBNZ Governor Orr. He didn't, however, touch on the rates outlook. The Governor stated: "Tackling these persistent inflationary pressures and bringing levels of ‘core’ inflation in line with our 1 to 3% target is an important part of bringing inflation back down to the 2% midpoint." You can see the full speech at this link.

• The NZ-AU 10-year yield differential closed unchanged at +63bps, with the NZ-US differential 2bps tighter at +56bps.
• The previously outlined BusinessNZ Manufacturing PMI was the only data today. It didn’t move the market.
• (Bloomberg) -- NZ posted its biggest calendar-year jump in population since the end of World War Two, reinforcing the scale of the potential impact on demand and inflation from record immigration. The estimated population increased by 2.8% in 2023. (See link)
• Swap rates are 1-5bps higher, with the 2s10s curve steeper.
• RBNZ dated OIS pricing is 1-4bps softer across meetings, with May-July leading. A cumulative 45bps of easing is priced by year-end.
• Next week, the local calendar sees the Performance Services Index and Non-Resident Bond Holdings on Monday, ahead of Q4 PPI on Wednesday.