NZGBS: Richer But Off Best Levels, US Tsys Slightly Weaker

NZGB benchmark yields closed slightly higher than the session’s lowest levels, 3-5bps lower on the day.

• Cash US tsys are 1-2bps cheaper in today's Asia-Pac session after Friday’s strong post-Payrolls rally. It may reflect some profit-taking along with a reaction to yesterday’s French election result and news on PBoC bond purchases.
• The PBoC will carry out temporary bond repurchase or reverse repurchase operations depending on the market situation during working days between 16:00 and 16:20.
• The local calendar is light until the RBNZ’s Policy Decision on Wednesday. Economists surveyed by Bloomberg unanimously expect a no-change decision. Most economists don’t expect the RBNZ to make any major changes to its hawkish commentary, despite signs of downside risks to growth.
• Net migration is also on Wednesday, with its release before the RBNZ decision.
• A majority of Shadow Board members recommended the RBNZ keep the OCR at 5.5% this week according to NZIER.
• RBNZ dated OIS pricing is slightly mixed across meetings today. A cumulative 35bps of easing is priced by year-end.
• Swap rates closed 3-5bps lower, with the 2s10s curve flatter.
• On Thursday, the NZ Treasury plans to sell NZ$225mn of the 3.0% Apr-29 bond, NZ$225mn of the 4.25% May-34 bond and NZ$50mn of the 2.75% Apr-37 bond.