NZGBS: Richer Post The Budget, FinMin Says Budget To Assist RBNZ

NZGBs closed 5-9.5bps richer, the curve bear-steepened, the calendar was empty today although we did have a 7, 10 & 15yr bond auction, bid/cover across all lines increased from prior auction, although total successful bids were well done.

• NZGB curve is tighter today, the 2y is -6.2bps at 4.877%, while the 10yr is -7.5bps at 4.800%.
• NZ FinMin Nicola Willis has received a letter alleging RBNZ Governor Orr breached the bank’s code of conduct, prompting discussions about the central bank's independence and its handling of employment matters, following Orr's response to criticism from the NZ Initiative regarding prudential regulation and banking competition.
• The FinMin has also defended her budget, stating that despite tax cuts, its overall effect is disinflationary, aiming to assist the RBNZ rather than hinder it. Economists raised concerns that the budget's less contractionary fiscal stance may complicate the central bank's efforts to tackle inflation and could make it more nervous about potential growth.
• Swap rates are flat to 1.5bps, the curve has bear-flattened
• RBNZ dated OIS pricing is 2-4bps lower heading into Nov meeting with A cumulative 23.5bps of easing is priced by year-end.
• Looking ahead: ANZ Commodity Price on Thursday