NZGBS: Richer, US Tsy Yields Lower After Memorial Day Holiday

NZGBs opened 7bp richer after US tsys enjoyed strong support after returning from an extended holiday weekend, risk appetite is generally positive after a bipartisan agreement to suspend the debt limit for the next two years was announced Saturday. Getting the deal to pass through a fractious Congress before the June 5 "X" date is the real challenge.

• After the NY bell, US tsy yields were 7-12bp lower with the curve steeper.
• Swap rates opened 6bp lower.
• RBNZ dated OIS opened 2-4bp softer with early February leading.
• Elsewhere, the RBNZ’s OCR has reached a contractionary level at 5.5% and will likely stay there until mid-2024, despite market expectations for an earlier cut, RBNZ Chief Economist Paul Conway told MNI. (link)
• The local calendar sees the release of ANZ Business Confidence (May) and CoreLogic House Prices (May). The confidence survey should reveal a continued weakness in business sentiment. Nevertheless, the overall economic landscape presents a mixed picture. While retailers and the construction sector are expected to report subdued conditions, businesses operating in service sectors are expected to experience more robust activity levels.
• In Australia, RBA Governor Lowe's testimony to parliament (0000 BST / 0900 AEST) and the release of April CPI monthly data will be the focal points.