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NZGBS: Opens Weaker After Extended Easter Holiday

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NZGBs open 4-5bp weaker as the local market plays catch up to developments in US Tsys after the extended Easter holiday. US Tsy yields climb higher in morning NY trade and hold in a narrow range through a generally subdued session.

  • After the bell, US Tsy yields were 2-3bp higher on the day with the 2-year and 10-year yields respectively 25bp and 12bp higher than the levels coinciding with the local market’s close on Thursday. NZ/US 10-year yield differential is -7bp at +58bp.
  • Trade volumes will likely improve today with London back online ahead of Wednesday's release of US CPI and FOMC minutes for the March meeting.
  • Swap rates open 8bp higher with implied swap spreads 3bp wider.
  • RBNZ dated OIS pricing opens firmer across meetings with 21bp of tightening priced for May. 40bp of easing is priced for Feb-24 off a terminal OCR expectation of 5.48% (July).
  • The Antipodean calendar is light today with Australia’s release of Westpac Consumer Confidence (Apr) and NAB Business Confidence (Mar) as the highlights.
  • Further afield, China releases March CPI/PPI data today ahead of Euro Area Retail Sales and US NFIB Small Business Optimism.

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