Free Trial

NZGBs Follow US Yields Lower, Bond Auctions Shortly

BONDS

In local morning trade, NZGBs are 6-7bps richer after US treasury futures ticked higher on slightly higher than expected weekly initial jobless claims, and lower continuing claim, GDP was in-line at 1.3% while Personal Consumption slips to 2.0% from 2.5% prior (2.2% est).

  • NZGB curve is tighter today, the 2y is -5.9bps at 4.88%, while the 10yr is -6.8bps at 4.807%.
  • The new NZ government presented its first budget and delivered the income tax cuts promised in the 2023 election. Finance minister Willis said that the cuts worth $14.7bn over 4 years would be offset fully by “savings and revenue initiatives” thus not adding to inflationary pressure. Slower growth has contributed to the deterioration in the budget position.
  • The NZ Treasury will offer $NZ2b in June, with each weekly auction to offer $NZ500m. It is expected that the Treasury will tap the May 2028 bond.
  • Swap rates are flat to 1.5bps lower
  • RBNZ dated OIS pricing is little changed for meetings out to Feb-25, A cumulative 21bps of easing is priced by year-end.
  • Later today we will have 7yr, 10yr and 15yr bond auctions
182 words

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.

In local morning trade, NZGBs are 6-7bps richer after US treasury futures ticked higher on slightly higher than expected weekly initial jobless claims, and lower continuing claim, GDP was in-line at 1.3% while Personal Consumption slips to 2.0% from 2.5% prior (2.2% est).

  • NZGB curve is tighter today, the 2y is -5.9bps at 4.88%, while the 10yr is -6.8bps at 4.807%.
  • The new NZ government presented its first budget and delivered the income tax cuts promised in the 2023 election. Finance minister Willis said that the cuts worth $14.7bn over 4 years would be offset fully by “savings and revenue initiatives” thus not adding to inflationary pressure. Slower growth has contributed to the deterioration in the budget position.
  • The NZ Treasury will offer $NZ2b in June, with each weekly auction to offer $NZ500m. It is expected that the Treasury will tap the May 2028 bond.
  • Swap rates are flat to 1.5bps lower
  • RBNZ dated OIS pricing is little changed for meetings out to Feb-25, A cumulative 21bps of easing is priced by year-end.
  • Later today we will have 7yr, 10yr and 15yr bond auctions