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NZGBS: Richer After Softer JOLTs Data Drives US Tsy Rally


In local morning trade, NZGBs are 4-12bps richer, with the 2/10 curve flatter, after US tsys rallied back to recent yield lows following lower-than-expected JOLTS job openings data. The US tsy 10-year yield finished down 9bps to 4.16%, while the 2-year yield finished 6bps lower at 4.57%.

  • The decline in job openings was the biggest monthly drop since May 2023 and marked the lowest level since 2021. Moreover, the ratio of openings/unemployed dropped to 1.34, the lowest since August 2021.
  • The rally was even larger for European and Australian 10-year bonds. Since the NZ close yesterday, the RBA decision to hold rates steady at 4.35% came without any hawkish overtones, while the ECB’s Schnabel, previously considered to be on the hawkish side of the ledger, provided some dovish remarks.
  • Swap rates are 7-12bps lower, with the implied short-end swap spread narrower.
  • RBNZ dated OIS pricing is flat to 2bps softer across meetings, with the terminal OCR expectation unchanged at 5.54%.
  • Locally, the whole milk powder price index rose 2.1% at the GDT auction (see BBG link for more details).
  • Also, Auckland's average home prices rose 8.7% m/m in Nov and posted the first y/y rise this year (see link).

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