NZGBS: Rates Higher On Post-Christmas Catch Up To Chinese COVID Restriction Rollback

Follow through from Tuesday’s wider price action, which included U.S. & European reaction to the rollback of another swathe of Chinese COVID restrictions, most notably surrounding international travel, as well as Friday’s cheapening in U.S. Tsys, has applied pressure to NZGBs.

• That leaves the major cash NZGB benchmarks running 8-10bp cheaper across the curve, with light bear steepening seen.
• Swap rates are 8.5-12.5bp higher across the curve, with swap spread widening in play.
• The local docket is empty in the time between Christmas and the New Year, which will leave broader macro headlines and spill over from wider cross-market flows at the fore in the coming days.