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NZGBS: Closed On A Weak Note, Spillover Selling From ACGBs

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NZGBs closed on a weak note, with benchmark yields 7-8bps higher. The NZGB 10-year rose 8bps to 5.0%, the highest level since November last year. With domestic drivers light on the ground, apart from the previously outlined Consumer Confidence, the local market drifted weaker in the close despite a slight richening in US tsys in today’s Asia-Pac session. Cash US tsys are ~1bp richer after cheapening 6-7bps in post-GDP dealings.

  • The ACGB market appears to have triggered some spill-over selling. ACGBs are 11-12bps cheaper after trading resumed after yesterday’s ANZAC Day holiday. NZ-AU 10-year yield differential closed 1bp tighter, while the NZ-US 10-year spread has widened 5bps versus Wednesday's close.
  • Swap rates closed 8-11bps higher, with the 2s10s curve steeper.
  • RBNZ dated OIS pricing closed 2-10bps firmer across meetings, with Feb-25 leading. A cumulative 46bps of easing is priced by year-end.
  • Next week, the local calendar will see Filled Jobs on Monday, ANZ Business Confidence on Tuesday, and the Q1 Employment Report, CoreLogic House Prices and the RBNZ Financial Stability Report on Wednesday.
  • Friday's US Data Calendar includes Personal Income/Spending and UofM Sentiment.
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NZGBs closed on a weak note, with benchmark yields 7-8bps higher. The NZGB 10-year rose 8bps to 5.0%, the highest level since November last year. With domestic drivers light on the ground, apart from the previously outlined Consumer Confidence, the local market drifted weaker in the close despite a slight richening in US tsys in today’s Asia-Pac session. Cash US tsys are ~1bp richer after cheapening 6-7bps in post-GDP dealings.

  • The ACGB market appears to have triggered some spill-over selling. ACGBs are 11-12bps cheaper after trading resumed after yesterday’s ANZAC Day holiday. NZ-AU 10-year yield differential closed 1bp tighter, while the NZ-US 10-year spread has widened 5bps versus Wednesday's close.
  • Swap rates closed 8-11bps higher, with the 2s10s curve steeper.
  • RBNZ dated OIS pricing closed 2-10bps firmer across meetings, with Feb-25 leading. A cumulative 46bps of easing is priced by year-end.
  • Next week, the local calendar will see Filled Jobs on Monday, ANZ Business Confidence on Tuesday, and the Q1 Employment Report, CoreLogic House Prices and the RBNZ Financial Stability Report on Wednesday.
  • Friday's US Data Calendar includes Personal Income/Spending and UofM Sentiment.