NZGBS: Richer But Off Bests, Spillover From JGB Cheapening

NZGBs closed 3-5bp richer, but well off session best levels, as $-bloc yields grind higher through the session in line with another post-BoJ decision cheapening in JGBs.

• US tsys are holding cheaper in today's Asia-Pac session with yields 3-4bps higher across the major benchmarks. TYU3 deals at 111-06 (-0-05).
• Swap rates are 2-4bp lower but 5bp higher than early session lows.
• RBNZ dated OIS pricing closed flat to 4bp firmer across meetings with mid’24 leading. Terminal OCR expectations closed at 5.67%.
• The Business confidence index rose to -13.1 in July from -18 in June, according to ANZ Bank. Business confidence read is highest since September 2021. The business activity outlook index fell to 0.8 from 2.7 in June. Inflation expectations ease to 5.14% vs. 5.29%. A net 82% expect to raise wages over the next 12 months.
• Tomorrow the local calendar sees June Building Permits with tighter financial conditions still likely to weigh.
• Tomorrow's antipodean highlight however will likely be the RBA Policy Decision. Bloomberg consensus expects a 25bp hike to 4.35%, but the decision is generally seen as a line ball.