Free Trial

NZGBS: Off Session Cheaps

BONDS

The major NZGB benchmarks cheapened by 4bp on Tuesday, with softer than expected retail sales data from across the Tasman likely allowing the space to correct from early session cheaps.

  • The space generally looked through the latest cabinet reshuffle as the incumbent Labour Party looks to garner support ahead of this year’s general election, centring on new PM Hipkins putting his own mark on the ruling party post-Ardern (he named a Minister for Auckland as part of the post-flood rebuild push in the area).
  • Swap rates were 2-6bp higher across the curve, with flattening apparent there, resulting in mixed swap spread performance.
  • RBNZ dated OIS is showing 61bp of tightening for next month’s meeting, effectively a coin flip between a 50 or 75bp OCR hike. Meanwhile, terminal OCR pricing has edged back above 5.35%.
  • Looking ahead, the latest quarterly labour market report headlines domestically on Wednesday. Unemployment is expected to hold steady at 3.3% (per the BG survey), with wage growth set to remain elevated even as Q/Q employment growth pulls back.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.