NZGBS: Richer After US Tsys Finished Last Week On A Firmer Foot

In local morning trade, NZGBs are 1-2bps richer, thanks to a relief rally in US tsys that capped off a busy week. However, the rally came after the 10-year yield pushed slightly above 4.5%, marking a fresh 16-year high. By the end of the week, the 10-year US tsy yield had eased to 4.43%, down by 6bps. This strengthening occurred despite the "higher for longer" communication from Fedspeak, which reinforced the Fed's "hawkish hold" stance earlier in the week.

• Federal Bowman called for "further rate hikes" to bring inflation back to target. At the same time, Fed Collins said Friday that further tightening is not off the table and emphasized that she expects rates to stay higher for longer. Meanwhile, Fed Daly said it's "unlikely inflation will reach 2% goal in 2024.
• Swap rates are 4bps lower.
• RBNZ dated OIS pricing is flat to 1bps softer across meetings, with terminal OCR expectations at 5.76%.
• (ABC) New Zealand's housing density experiment saw approvals for new builds in Auckland 'skyrocket' while house prices kept climbing. The test case went so well, that NZ's national government adopted a version of it for the whole country. (See link)
• This week the local calendar is empty until ANZ Business Confidence on Thursday.