NZGBS: Richer But Off Best Levels Ahead Of US Payrolls

NZGBs closed 2-5bp richer, but off session bests, as global bond markets await the release of US Non-Farm Payrolls data later today. An increase in payrolls of 170k is expected in August versus 187k in July. The unemployment rate is forecast to be unchanged at 3.5%.

• There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined ANZ consumer confidence data, which printed a rise of 1.6%.
• Accordingly, local participants have likely been on headlines and US tsys watch. US tsys are flat to 1bp cheaper across the major benchmarks in Asia-Pac dealing. Ranges have been narrow.
• Swap rates are 1-4bp lower, with the 2s10s curve flatter and implied swap spreads wider.
• RBNZ dated OIS pricing is little changed.
• Next week the local calendar sees Terms of Trade (Q2) on Monday, ANZ Commodity Prices (Aug) on Tuesday, Volume of All Buildings (Q2) on Wednesday and Mfg Activity (Q2) on Thursday.
• Also, next Thursday, the NZ Treasury plans to sell NZ$225mn of the 4.5% May-30 bond, NZ$175mn of the 2.0% May-32 bond and NZ$100mn of the 2.75% Ap-37 bond.