NZGBS: Closed Richer, At Bests, Headlines Watch

NZGBs finished the session on a high note, experiencing a 2-3bp richening. In the absence of domestic catalysts, local participants have primarily been monitoring US tsy futures and news headlines. In Asia-Pacific trading, US tsy futures are currently trading slightly lower as the market digests the announcement of a bipartisan debt ceiling agreement reached on Saturday. It's important to note that the US market is closed today in observance of the Memorial Day holiday.

• Swap rates are 2-4bp lower with the 2s10s curve 2bp flatter.
• RBNZ dated OIS closed mixed with meetings out to Feb'24 flat to 3bp firmer and meetings beyond 2-3bp softer.
• Westpac’s Monthly Employment Indicator showed a more-than-expected 0.6% m/m rise in-filled jobs to +3.8% y/y, the fastest since January 2022. The series is based on income tax data, which is not only comprehensive but also monthly, whereas Stats NZ labour market data is quarterly.
• On-farm inflation accelerated to 16.3% in the year through March, according to a Beef+Lamb New Zealand report Monday in Wellington.
• The local calendar sees April Building Permits slated for release tomorrow. The number of new dwelling consents rose 7% in March, driven by a large rise in multi-unit consent numbers. A reversal of this strength is expected.