NZGBS: Richer After US Tsys Recoup Some Of Tuesday’s Losses

In local morning trade, NZGBs are 2-3bps richer after US tsys recouped some of Tuesday’s post-CPI sell-off. US tsys bull-steepened, with yields 2-8bps lower. Comments from the Fed's Goolsbee, downward revisions to December PPI data, a rethink of the CPI data and a lack of follow-through selling presented a buying opportunity for the bond bulls.

• Chicago Fed’s Goolsbee (’25 voter) stuck to his dovish guns: “As I always say, especially about inflation, one month is no months. Let’s not get amped up when you get one month of CPI that was higher than what you expected it to be.”
• Swap rates are 2-3bps lower.
• RBNZ dated OIS pricing flat to 3bps softer across meetings. A cumulative 47bps of easing is priced by year-end.
• NZ Government’s Financial Statements for the six months ended December showed an Operating Deficit before gains, losses of NZ$2.74bn, NZ$1.24b narrower than projected in the half-year fiscal update.
• NZ Net Migration data for December showed a gain of 125,962 people in the year ended December 31 versus a revised +132,425 in November.
• Today, the NZ Treasury plans to sell NZ$275mn of the 4.5% Apr-27 bond, NZ$150mn of the 3.5% Apr-33 bond and NZ$75mn of the 2.75% May-51 bond.