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NZGBS: Richer But Off Bests, Underperforms US Tsys


NZGBs closed 2-3bp richer but at session cheaps. The intra-session decline was influenced by the movement of US tsys, which retreated from their earlier highs in the Asia-Pacific session Cash US tsys remain richer, but only by 1bp across benchmarks. NZGBs nonetheless underperformed US tsys with the NZ/US 10-year differential 4bp wider at +60bp.

  • Swap rates closed flat to 4bp lower with the 2s10s curve 4bp flatter.
  • RBNZ dated OIS closed 1-2bp softer across meetings.
  • ANZ business confidence rose to -31.1 in May from -43.8, which is the highest since December 2021, but still well below the +4.3 historical average. Business activity rose to -4.5 from -7.6 and while it has been improving over 2023 also remains well below average. Activity is signalling that growth probably troughed in H1 2023 and inflation expectations that CPI inflation should moderate further.
  • The local calendar is light tomorrow ahead of Q1 data for the Terms of Trade and Volume of All Buildings on Friday.
  • Later today sees the release of the May Chicago PMI, April JOLTS and the Fed’s Beige Book.
  • The NZ Treasury announced that they plan to sell NZ$200mn of the 0.25% 15 May 2028 bond, NZ$150mn of the 4.25% 15 May 2034 bond and NZ$50mn of the 2.75% 15 May 2051 bond tomorrow.

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