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NZGBS: Richer After US Tsys Rally Off Cheaps On Risk-Off Move

BONDS
MarketsStoryFixed Income Bullets

In local morning trade, NZGBs are flat to 3bps richer after US tsys rallied off session cheaps as US equities weakened going into the weekend. The 10-year rate was fractionally higher by the close at 4.44% after testing 4.50% early in Friday’s NY session. The 2-year finished 4bps lower at 4.30% as rate-cut bets crept back in. 

  • Fast two-way trade as US tsys see-sawed cheaper after higher-than-expected Retail Sales for October and up-revisions for the prior. Meanwhile, import/export price indexes came out higher than expected, and Empire Mfg jumped to late 2021 levels.
  • Gold dipped to $2561.64 per ounce, the lowest since September on trimmed Fed rate cut bets.
  • NZ’s performance of services index rose to 46 in October from 45.7 in September. ”The activity outlook for the sector has improved in recent business surveys, but the here and now remains extremely challenging”: BNZ
  • NZ producer output prices rose 1.5% q/q (1.9% y/y) in 3Q.
  • Swap rates are 1bp lower.
  • RBNZ-dated OIS pricing has little changed. A cumulative 87bps of easing is priced by February, with 50bps by year-end.
  • Today, the local calendar will also see Non-Resident Bond Holdings data later.
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In local morning trade, NZGBs are flat to 3bps richer after US tsys rallied off session cheaps as US equities weakened going into the weekend. The 10-year rate was fractionally higher by the close at 4.44% after testing 4.50% early in Friday’s NY session. The 2-year finished 4bps lower at 4.30% as rate-cut bets crept back in. 

  • Fast two-way trade as US tsys see-sawed cheaper after higher-than-expected Retail Sales for October and up-revisions for the prior. Meanwhile, import/export price indexes came out higher than expected, and Empire Mfg jumped to late 2021 levels.
  • Gold dipped to $2561.64 per ounce, the lowest since September on trimmed Fed rate cut bets.
  • NZ’s performance of services index rose to 46 in October from 45.7 in September. ”The activity outlook for the sector has improved in recent business surveys, but the here and now remains extremely challenging”: BNZ
  • NZ producer output prices rose 1.5% q/q (1.9% y/y) in 3Q.
  • Swap rates are 1bp lower.
  • RBNZ-dated OIS pricing has little changed. A cumulative 87bps of easing is priced by February, with 50bps by year-end.
  • Today, the local calendar will also see Non-Resident Bond Holdings data later.