NZGBS: Closed On A Weak Note Ahead Of Jackson Hole Speeches

NZGBs closed at session cheaps, with benchmark yields 4-5bp higher. Without domestic drivers, local participants likely eyed headlines and US tsys ahead of the keenly anticipated address by Fed Chair Powell at the Jackon Hole Symposium.

• US tsys are sitting little changed in Asia-Pac trade. The ranges have been narrow, with the proximity to Fed Chair Powell's speech today a limiting factor.
• Swap rates are 3-5bp higher, with implied swap spreads little changed.
• RBNZ dated OIS pricing is 1-3bp firmer for meetings beyond October. Terminal OCR expectations sit at 5.65%.
• Bloomberg reports that ANZ Bank says China’s slowing economy could help curb NZ inflation, and may allow the RBNZ to avoid another interest rate hike, according to a weekly report. Nevertheless, ANZ maintains the view that a 25bp hike is needed in November. (See link)
• Next week the local calendar is empty until Building Permits on Wednesday and ANZ Business Confidence on Thursday.
• Next Thursday the NZ Treasury plans to sell NZ$225mn of the 0.25% May-28 bond, NZ$175mn of the 1.5% May-31 bond and NZ$100mn of the 1.75% May-41 bond.