NZGBs Hold Cheaper On The Day, With Local Issuance & Global Matters At Work

NZGBs meandered through the second half of Monday trade, after an early round of cheapening centring on some hawkish Fedspeak, meaningful support for the Chinese property sector and confirmation of the launch of the green NZGB May-34, which will price tomorrow.

• The lack of a lasting bid in the global equity space, despite the presence of the aforementioned Chinese support package for the property sphere, likely limited the weakness witnessed.
• That left the major NZGBs 4-6bp cheaper at the bell, with some light bear flattening in play.
• Meanwhile, swap rates were little changed to ~9bp higher, resulting in mixed swap spread performance as shorter dated spreads narrowed and longer dated spreads widened.
• RBNZ dated OIS pricing was incrementally higher on the day, leaving terminal OCR pricing just below 5.10%.
• Looking ahead, the pricing of the aforementioned green NZGB syndication and REINZ house price data headline the local docket on Tuesday.