NZGBS: Little Changed Despite An Extension to US Tsys Post-FOMC Rally

In local morning trade, NZGBs are unchanged after US tsys extended their post-FOMC rally, aided by the regional banking concerns, ahead of today’s Non-Farm Payrolls release. US tsys bull-flattened, with yields finishing flat to 5bps lower.

• The KBW Regional Banking Index closed down ~2% from -5% at midday driven by concerns over NY regional banks after New York Community Bancorp (purchaser of collapsed Signature Bank shares) fell over 40% yesterday and was as much as 14% lower again on Thursday.
• US tsys were also supported by higher than expected Initial Jobless Claims (242k vs. 212k est) and Continuing Claims (1.898M vs. 1.839M est, prior down-revised slightly to 1.828M from 1.833M).
• Meanwhile, Nonfarm Productivity printed higher than expected at 3.2% vs 2.5% est (prior down-revised to 4.9% from 5.2%) while Unit Labor Costs came in at 0.5% vs. 1.2% est (prior revised to -1.1% from -1.2%).
• Swap rates are 1bp lower to 1bp higher, with the 2s10s curve steeper.
• RBNZ dated OIS pricing is 1-2bps softer across meetings beyond May. A cumulative 96bps of easing is priced by year-end.
• ANZ Consumer Confidence rose 0.5% m/m in January, while Building Permits rose 3.7% m/m in December after -10.6% prior.