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NZGBS: Outperformance Noted, Index Inclusion Eyed


NZGBs richened on Friday, outperforming their major global counterparts, with focus on next month’s WGBI index inclusion seemingly at the fore.

  • An element of short covering ahead of the long NZ weekend may also have been in play, with NZ markets closed on Monday as the country observes the Labor Day holiday.
  • Note that a move lower in core global FI markets (higher yields) came after the local close.
  • Swap spreads were generally a little wider across the curve, with some receiver side flows in swaps probably helping the bid in NZGBs in the second half of the day.
  • RBNZ dated OIS continue to price a terminal rate of just over 5.40%.
  • Local data had little impact on the space, with a marginal monthly uptick in credit card spending observed, while Sep trade balance data revealed a fourth consecutive monthly trade deficit, albeit narrowing a touch from the record deficit witnessed in August.
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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