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NZGBS: Closed Sharply Cheaper But Off The Worst Levels, US PPI & Claims Data Later Today

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NZGBs closed sharply cheaper, with benchmark yields 13-14bps higher, despite a slight paring of losses late in the session. With the domestic data calendar empty, the move away from session cheaps likely reflected the slight bull-steepening observed in the US cash curve during today's Asia-Pacific session. Cash US tsys are dealing flat to 3bps richer.

  • Today’s weekly supply saw mixed demand metrics, with cover ratios ranging from 1.8x (Apr-29) to 3.2x (May-32).
  • (Bloomberg) NZ household debt-servicing costs neared a six-year high as interest rates climbed last year, adding to strains on consumer spending. Interest payments increased to 8.4% of household disposable income in the 12 months through December, Statistics New Zealand said. That’s up from 7.9% in the year ended September and is the highest since March 2018. (See link)
  • Swap rates closed 14-17bps higher, with the 2s10s curve steeper.
  • RBNZ dated OIS pricing is 1-14bps firmer across meetings, with late-24/early-25 leading. A cumulative 45bps of easing is priced by year-end.
  • Tomorrow, the local calendar will see BusinessNZ Manufacturing PMI, Card Spending and Food Prices data.
  • The US calendar will see PPI, Jobless Claims & Fed Speak later today.
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NZGBs closed sharply cheaper, with benchmark yields 13-14bps higher, despite a slight paring of losses late in the session. With the domestic data calendar empty, the move away from session cheaps likely reflected the slight bull-steepening observed in the US cash curve during today's Asia-Pacific session. Cash US tsys are dealing flat to 3bps richer.

  • Today’s weekly supply saw mixed demand metrics, with cover ratios ranging from 1.8x (Apr-29) to 3.2x (May-32).
  • (Bloomberg) NZ household debt-servicing costs neared a six-year high as interest rates climbed last year, adding to strains on consumer spending. Interest payments increased to 8.4% of household disposable income in the 12 months through December, Statistics New Zealand said. That’s up from 7.9% in the year ended September and is the highest since March 2018. (See link)
  • Swap rates closed 14-17bps higher, with the 2s10s curve steeper.
  • RBNZ dated OIS pricing is 1-14bps firmer across meetings, with late-24/early-25 leading. A cumulative 45bps of easing is priced by year-end.
  • Tomorrow, the local calendar will see BusinessNZ Manufacturing PMI, Card Spending and Food Prices data.
  • The US calendar will see PPI, Jobless Claims & Fed Speak later today.