Free Trial

NZGBS: Richer, US Tsys React Positively To Weaker Data

BONDS

In local morning trade, NZGBs are 2-3bps richer after US tsys reacted positively to weaker-than-expected US economic data ahead of the 4th of July holiday.

  • US tsys gapped higher after ISM Services index data came out lower than expected (48.8 vs. 52.6).
  • There were also further signs of cooling in the labour market: ADP employment was modestly lower than expected in June at 150k (cons 165k) after a slightly upward revised 157k (initial 152k) in May; Initial jobless claims were slightly higher than expected at 238k (sa, cons 235k) in the week to Jun 29 after a marginally upward revised 234k (initial 233k).
  • Little reaction to the FOMC June minutes release. Focus now turns to Non-Farm Payrolls on Friday.
  • NZ Government financial statements for 11 months ended May 31 showed an operating deficit before gains and losses of NZ$7.75bn, NZ$1bn narrower than projected in the May 30 budget.
  • NZ residential property prices decreased 0.5% from a month earlier: CoreLogic.
  • Swap rates are 2bps lower.
  • RBNZ dated OIS pricing is slightly softer across meetings. A cumulative 37bps of easing is priced by year-end.
  • Today, the NZ Treasury plans to sell NZ$225mn of the 1.5% May-31 bond, NZ$175mn of the 4.25% May-34 bond and NZ$100mn of the 1.75% May-41 bond.
207 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.

In local morning trade, NZGBs are 2-3bps richer after US tsys reacted positively to weaker-than-expected US economic data ahead of the 4th of July holiday.

  • US tsys gapped higher after ISM Services index data came out lower than expected (48.8 vs. 52.6).
  • There were also further signs of cooling in the labour market: ADP employment was modestly lower than expected in June at 150k (cons 165k) after a slightly upward revised 157k (initial 152k) in May; Initial jobless claims were slightly higher than expected at 238k (sa, cons 235k) in the week to Jun 29 after a marginally upward revised 234k (initial 233k).
  • Little reaction to the FOMC June minutes release. Focus now turns to Non-Farm Payrolls on Friday.
  • NZ Government financial statements for 11 months ended May 31 showed an operating deficit before gains and losses of NZ$7.75bn, NZ$1bn narrower than projected in the May 30 budget.
  • NZ residential property prices decreased 0.5% from a month earlier: CoreLogic.
  • Swap rates are 2bps lower.
  • RBNZ dated OIS pricing is slightly softer across meetings. A cumulative 37bps of easing is priced by year-end.
  • Today, the NZ Treasury plans to sell NZ$225mn of the 1.5% May-31 bond, NZ$175mn of the 4.25% May-34 bond and NZ$100mn of the 1.75% May-41 bond.