NZGBS: Little Changed After FOMC Delivers Few Surprises

In early local trade, NZGBs are little changed after US tsys finished with a bull steepening of the curve following the FOMC’s decision to raise the funds rate by 25bp, as expected.

• Front-end US tsys finished 6bp richer than just before the FOMC statement to be -2bp on the day after an unusually small reaction to the statement. The presser leaned slightly dovish with reiteration of signs of progress for instance in labour market balance, played up the potential impact of tighter credit conditions and didn’t outwardly lean on some recent comments from other Fed staff that lags could be shorter than usual.
• With Powell emphasising data dependency, tomorrow sees an important docket with the 1st release for Q2 GDP, preliminary durable goods for July and jobless claims (along of course with the ECB decision) before Friday's Q2 ECI and PCE reports.
• Swap rates are little changed.
• RBNZ dated OIS pricing is little changed.
• Today the local calendar is empty. ANZ Consumer Confidence is due tomorrow.
• In Australia, Terms of Trade data for Q2 is due.
• Today the NZ Treasury plans to sell NZ$225mn of the 0.5% May-26 bond, NZ$225mn of the 1.5% May-31 bond and NZ$50mn of the 2.75% May-51 bond.