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NZGBs Off Best Levels, But Still Richer On The Day

BONDS

NZGBs gave back some of their early gains as the major cash benchmarks finished the session 1-5bp richer vs. Wednesday’s closing levels, with the curve bull flattening. Swap spreads ran tighter, pointing to receiver side swap flow-based support for NZGBs.

  • Local data failed to impact the space, with the PPi output metric softening in Q/Q terms, albeit running at still elevated levels when annualised.
  • NZGBS found a base ahead of the local data, with the direction of travel for both U.S. Tsys and ACGBs (which saw a limited downtick in the wake of the latest labour market report) helping the space to nudge further away from best levels as the day wore on.
  • RBNZ dated OIS is little changed on the day, with just under 65bp of tightening priced in for next week’s RBNZ decision, alongside a terminal OCR of ~5.05%.
  • Friday’s domestic docket is empty.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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