NZGBS: Little Changed As Cash US Tsys Play Catch Up To Monday’s Moves

In local morning trade, NZGBs are little changed as global markets largely consolidated Monday’s moves instigated by the Hamas/Israel conflict. Oil traded sideways, maintaining the ~4% increase yesterday. Cash US Tsys finished 11-15bps richer, with the belly outperforming, as trading resumed after Monday’s holiday.

• US Tsy futures bounced off session lows following positive comments by Atlanta Fed Bostic as he reaffirmed his view that the Fed's benchmark interest rate is high enough to get inflation under control without dragging the economy into recession.
• US STIR terminal rate pricing shows a 30% chance of another 25bp hike from the Fed this cycle, down from ~50% at the end of last week.
• Swap rates are flat to 1bp lower, with the 2s10s curve flatter.
• RBNZ dated OIS pricing is flat for meetings out to Jul’24 and 1-2bps softer beyond.
• Bloomberg reports that Rabobank has released the Q3 survey of farmer confidence. It showed a net 72% of farmers expect agricultural economic conditions to deteriorate in the coming 12 months, up from 57% in Q2. Confidence is at its lowest level since the survey began 20 years ago. (See link)
• Net Migration data shows a net gain of 110,245 people in the year ended Aug. 31 after monthly rise of 9,980.