NZGBS: Heavy As Long-Dated US Tsy Yields Push To Fresh Cycle Highs

In local morning trade, NZGBs are 1-3bps cheaper after long-dated US tsy yields reached new multiyear highs, extending the selloff unleashed by the Fed’s affirmation Wednesday to keep interest rates high as long as necessary to curb inflation. The 30-year bond’s yield rose 13bps to 4.57%, its highest level since 2011. The 10-year approached 4.5%, last seen in 2007. The move gained momentum after jobless claims unexpectedly fell (201k versus 225k est. and 220k prior), underscoring labour-market resilience.

• Swap rates are 2-7bps higher, with the 2s10s curve steeper.
• RBNZ dated OIS pricing is little changed.
• (AFR) Bond investors’ pain isn’t over yet, even though the Federal Reserve is done raising interest rates, said Bill Gross, the former chief investment officer of PIMCO. Gross said bond markets are headed for an unprecedented third year of losses, because of sticky inflation and widening deficits, a result of government fiscal spending he equates with throwing “money out of a helicopter”.
• NZ consumer confidence fell in the three months through September, according to Westpac McDermott Miller. The index fell to 80.2 from 83. The ‘squeeze’ on households’ finances is continuing, with further increases in living costs and mortgage payments: Westpac.
• Today the local calendar also sees Trade Balance data for August.