NZGBS: Richer But Underperforms $-Bloc, Consumer Sentiment Data Tomorrow

Short to mid-curve NZGBs closed richer, but off session bests, with benchmark yields 1-3bp lower and the curve steeper. The 10-year benchmark closed 1bp cheaper.

• Although there were no significant domestic factors at play, the local market experienced strength during the session, likely due to an extension of the post-FOMC rally in US tsys and ACGBs in the Asia-Pac trade. The local market's gains were further supported by robust demand witnessed at the weekly auction, evident from cover ratios ranging from 3.35x to 4.00x.
• Despite the overall positive performance, NZGBs underperformed their counterparts in the $-Bloc. The NZ-US and NZ-AU 10-year yield differentials respectively 4bp and 5bp wider at +79bp and +64bp.
• Swap rates closed 3-4bp lower.
• RBNZ dated OIS closed with pricing flat to 3bp softer across meetings with Jul’24 leading.
• Tomorrow the local calendar sees ANZ Consumer Confidence.
• With Powell emphasising data dependency, later today sees an important US docket with the 1st release for Q2 GDP, preliminary durable goods for July, jobless claims and other second-tier releases (along of course with the ECB decision) before Friday's Q2 ECI and monthly PCE reports.