NZGBS: Opened Flat, No Local Data, Awaits US CPI

NZGBs opened unchanged with US tsys yields a little higher in NY trade, extending their recent sell-off. Cash tsys pared early session losses after surprisingly strong demand shown at the 3-year auction, which delivered the highest cover ratio since 2018. After the NY bell, the 2- and 10-year benchmark yields were respectively 2bp and 1bp higher.

• Swap rates opened flat to 1bp higher with the 2s10s curve 1bp steeper and the long-end implied swap spread slightly wider.
• RBNZ dated OIS opened little changed across meetings with 25bp of tightening for the upcoming May 24 meeting.
• The Australian Federal Budget yesterday revealed a much better fiscal position than projected six months ago, with a small surplus for FY23 (0.2% of GDP) and smaller projected deficits in the out years. In contrast, the financial statements of the NZ government for the nine months ending March showed a deterioration in their fiscal position with the budget deficit being NZ$2.48 billion wider than the projection in the half-year fiscal update. The NZ Treasury cited lower tax revenue and additional expenditure related to the North Island weather events as the reasons for the wider deficit.
• There is no Antipodean data slated for today ahead of US CPI on later today.