NZGBS: Richer As Gilts & Bunds Drag Global Yields Lower

NZGBs are 3-4bp richer across the curve in early local trade after US tsy yields decline despite stronger-than-expected housing starts and permits. Tsys briefly sold off on the data but quickly bounced as they tracked yield declines for gilts and bunds.

• Following a challenging period, UK gilt yields witnessed a decline of 14-16bp as investors were attracted by the higher yields available. This occurred ahead of two significant risk events: the release of UK CPI figures tonight and the upcoming BoE meeting later in the week.
• Additionally, the 10-year bund yield decreased by 11bp as individual views were expressed by members of the ECB Governing Council.
• Swap rates are 3-4bp lower with the 2s10s curve 1bp flatter and implied swap spreads little changed.
• RBNZ dated OIS pricing is flat to 2bp softer across meetings with terminal OCR expectations at 5.60%.
• Whole Milk Powder Average Price fell to $3,172/tonne, ticking lower from the prior of $3,173/tonne.
• The antipodean calendar is light today with Australia’s Westpac-MI Leading Index as the highlight.
• As a result, the focus probably turns to Fed Chairman Powell's semi-annual testimony House Services Panel later today, though it's unlikely Chair Powell will deviate from last week's policy messaging.