Free Trial

NZGBS: Closed Richer Despite Post-CPI ACGB Cheapening

BONDS

NZGBs closed at the session's best levels, 1-5bps richer, despite a sharp cheapening in ACGBs following the release of higher-than-expected Q3 CPI data. NZGB yields were 2-3bps lower in post-AU CPI dealings. In contrast, ACGBs are 4-9bps cheaper.

  • Notably, the Australian CPI release stands out as it bucks the recent trend observed in the peripheral regions of the $-bloc, specifically New Zealand and Canada, where inflation prints have fallen below expectations. Additionally, the Australian monthly CPI data for September revealed a significant uptick in inflation, suggesting that it carries strong momentum into the fourth quarter. This newfound momentum is expected to play a role in the likely revision of the RBA's Q4 CPI forecasts, potentially pushing them upward.
  • The NZ-AU 10-year yield differential closed a massive 9bps tighter at +68bps versus its mid-October high of +99bps.
  • Swap rates closed 2-4bps lower, with the 2s10s curve unchanged.
  • RBNZ dated OIS pricing closed 1-4bps softer across meetings, with terminal rate expectations at 5.60%.
  • Tomorrow, the local calendar is empty again, ahead of ANZ Consumer Confidence on Friday.
  • Tomorrow, the NZ Treasury plans to sell NZ$200mn of the 4.5% Apr-27 bond, NZ$200mn of the 3.5% Apr-33 bond and NZ$100mn of the 2.75% May-51 bond.

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.