NZGBS: Little Changed Despite Further Strength For US Tsys

In local morning trade, NZGBs are little changed despite US Tsys extending the post-FOMC rally on heavy volume. The 10-year yield fell to a 5-month low of 3.88% as the market continued to react to Wednesday’s FOMC rate decision, which acknowledged inflation had eased. It also reiterated that the Fed is "prepared to tighten policy further, if appropriate".

• Barclays has revised its Fed rate cut call to reflect the dovish message from yesterday's FOMC communications, and this week's soft CPI/PPI inflation data. Following the meeting, they now see three rate cuts in 2024, starting in June.
• JPMorgan has also shifted its first cut date forward: "With the recent better news on PCE inflation, and with the Committee signalling that further inflation progress will be sufficient for easier policy, we now look for a first cut in June (previously July) and for a target range 125bp lower by year-end."
• Both the ECB and BOE left rates on hold but signalled that bets on imminent rate cuts may be premature.
• NZ’s manufacturing PMI rose to 46.7 in November from a revised 42.9 in October.
• Swap rates are flat to 2bps lower, with the 2s10s curve flatter.
• RBNZ dated OIS pricing is little changed across meetings.