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BLOCK, Jun'23 10Y Call Spd

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Equities Roundup: SPX Second Breach 50-Day EMA

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NZGBS: Post-RBA Pressure

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NZGBs adjust to the fallout from yesterday’s RBA meeting, with benchmark yields pushing ~8bp higher in what has been a parallel shift, while U.S. Tsy yields sit at to a little above levels observed ahead of Fed Chair Powell’s Tuesday interview, with the initial dovish impulse from the event (a lack of meaningful pushback to market reaction to last week’s FOMC, albeit stressing that the Fed will be reactive to data in that it could do more than envisaged on the tightening front, if required, while on inflation he noted that “this process is likely to take quite a bit of time. It’s not going to be, we don’t think, smooth. It’s probably going to be bumpy”) fading into the NY close.

  • Swap rates are 8-10bp higher, with some light flattening apparent on that curve, once again linked to the digestion of yesterday’s RBA meeting, while swap spreads are flat to a touch wider.
  • RBNZ-dated OIS ticks higher, leaning on post-RBA dynamics across the Tasman, a little over 55bp of tightening is priced into this month’s meeting, while terminal OCR pricing shows above 5.25% (failing to breach yesterday’s early high thus far).
  • There isn’t much in the way of meaningful local or macro risk events slated for Wednesday’s session, which will leave participants on headline watch.
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NZGBs adjust to the fallout from yesterday’s RBA meeting, with benchmark yields pushing ~8bp higher in what has been a parallel shift, while U.S. Tsy yields sit at to a little above levels observed ahead of Fed Chair Powell’s Tuesday interview, with the initial dovish impulse from the event (a lack of meaningful pushback to market reaction to last week’s FOMC, albeit stressing that the Fed will be reactive to data in that it could do more than envisaged on the tightening front, if required, while on inflation he noted that “this process is likely to take quite a bit of time. It’s not going to be, we don’t think, smooth. It’s probably going to be bumpy”) fading into the NY close.

  • Swap rates are 8-10bp higher, with some light flattening apparent on that curve, once again linked to the digestion of yesterday’s RBA meeting, while swap spreads are flat to a touch wider.
  • RBNZ-dated OIS ticks higher, leaning on post-RBA dynamics across the Tasman, a little over 55bp of tightening is priced into this month’s meeting, while terminal OCR pricing shows above 5.25% (failing to breach yesterday’s early high thus far).
  • There isn’t much in the way of meaningful local or macro risk events slated for Wednesday’s session, which will leave participants on headline watch.