NZGBS: Little Changed, FOMC Less Hawkish Than Feared, US Tsys Finish Richer

In local morning trade, NZGBs are little changed following a session where US tsys finished richer. This uptick came after Fed Chair Powell and the FOMC were not as hawkish as feared. US tsys reacted immediately to the statement and extended those gains when Powell ruled out a further rate hike in his press conference.

• US tsy yields were down over double digits before profit-taking set in. The 2-year fell 12bps to 4.92%. Nevertheless, it closed back under the key 5% mark at 4.960%. The 10-year richened as much as 11bps to 4.58% but finished at 4.63%.
• Swap rates are unchanged.
• RBNZ dated OIS pricing is 1-3bps softer for meetings beyond July. A cumulative 37bps of easing is priced by year-end.
• RBNZ officials have appeared in parliament to discuss the Financial Stability Report. Deputy Governor Christian Hawkesby said, “The economy is evolving largely as we expect it in terms of what happens with higher interest rates — the way that works through the economy, the sectors that feel that the most, the way that flows into people’s ability to meet their mortgage commitments and other commitments.”
• Building Permits for March fall 0.2% m/m.
• Today, the NZ Treasury plans to sell NZ$250mn of the 4.5% May-30 bond and NZ$250mn of the 3.5% Apr-33 bond.