NZGBS: Little Changed, Syndicated Tap Of May-28 Priced Today

In local morning trade, NZGBs are little changed after US tsys extended their recent rally to day five. The 2- and 10-year US tsys finished 5bps richer at 4.72% and 4.28% respectively.

• US tsys cheered further signs of a slowing job market and cooling price pressures, with the BoC's policy easing and plans for another in July bolstering hopes for global rate cuts. The ECB meeting is this evening with widespread expectations of an easing.
• ADP jobs gain was lower than expected at +152k vs. +175k est (192k prior down-revised to +188k).
• ISM Services data was mixed: Index higher than exp (53.8 vs. 51.0 est) but lower Prices Paid (58.1 vs. 59.0 est).
• Swap rates are 1bp lower.
• RBNZ dated OIS pricing is slightly softer across meetings. A cumulative 24bps of easing is priced by year-end.
• May CoreLogic House Prices -0.2% m/m, +1.1% y/y. This was the second straight monthly decline as an increasing volume of properties for sale weighed.
• Construction work fell 4.0% q/q (estimate -0.5%) in 1Q versus a revised +0.5% in 4Q.
• Today, the local calendar will also see ANZ Commodity Prices.
• Yesterday, the NZ Treasury launched a syndicated tap of May-28 bond, seeking between NZ$2bn and NZ$4bn. It will be priced today, with guidance 3-6bps under the Apr-27 bond. Today’s bond auction is cancelled.