NZGBS: Richer, US Tsys Bull-Steepen After US CPI Data

In local morning trade, NZGBs are 3bps richer after US tsys finished with a bull-steepening. Benchmark yields were 3-11bps lower following the release of US CPI data, which was more-or-less in line with expectations. CPI m/m (0.3% vs. 0.2% est), y/y (3.4% vs. 3.2% est); Ex Food and Energy m/m (0.3% vs. 0.3% est), y/y (3.9% vs. 3.8% est).

• US tsys climbed off midmorning lows in a positive reaction to Croatian National Bank governor Boris Vujcic's comment at an MNI Connect webcast that the ECB should cut interest rates in 25bp increments, although 50bp moves should not be excluded if warranted by incoming data.
• Cleveland Fed Mester's comments that March is probably too early for a rate cut were largely ignored. The market focused on dovish comments from Richmond Fed Barkin: needs convincing evidence inflation is stabilizing, but is open to cutting "once inflation on track to 2%".
• Swap rates are 6-7bps lower, with the 2s10s steeper.
• RBNZ dated OIS pricing is little changed.
• Today, the local calendar is empty.