NZGBS: Early Richening Extends In Wake Of Major Central Bank Meetings

NZGBs firmed as Friday trade wore on, with core global FI markets remaining underpinned in Asia-Pac hours, as the region looked to Thursday’s key central bank meetings/guidance, which triggered some adjustments ahead of Friday’s NFP release.

• That left the major NZZGB benchmarks running 10-14bp richer, as the curve flattened. Meanwhile, swap rates were 6-13bp lower across the major benchmarks, leaving swap spreads a touch wider on the day.
• RBNZ dated OIS continued to indicate just over 50bp of tightening for next month’s meeting after the well-documented pullback observed YtD (with domestic labour market and CPI data, as well as the readthrough from the major global central banks, in the driving seat in recent weeks). Meanwhile, terminal OCR pricing is showing below 5.20%, as the global central bank impulse made itself felt.
• There wasn’t much in the way of meaningful domestic headlines to trade off of.
• Any follow through from the impending U.S. NFP release will dominate early trade on Monday. Meanwhile, next week’s local docket sees card spending data, the manufacturing PMI & REINZ house price data.