NZGBS: Richer After Inflation Expectations Support US Tsys

In local morning trade, NZGBs have twist-flattened, with yields 2bps higher to 4bps lower, after US tsys 1-3bps richer on Monday. Us tsys started the day with moderate losses in spillover from Europe but a decline in the NY Fed's inflation expectation index, and comments from Fed voter Bostic helped the bonds recover. Bostic said that he expects 2 25bp cuts this year, beginning in Q3.

• After the NY close, Fed Bowman said inflation could continue to decline and flagged the potential to begin cutting interest rates at some point to prevent overly tight policy.
• Commodities started the trading week softer, with Brent tumbling 4% and iron ore easing. Gold slid almost 1%.
• Swap rates are 4-5bps lower, with implied swap spreads tighter.
• RBNZ dated OIS pricing is flat to 4bps softer across meetings, with year-end easing expectations at 93bps.
• Today, the local calendar is empty, but Australia sees Retail Sales and Building Approvals. Tokyo CPI is also due in Japan.