NZGBS: Richer, US Tsys Strengthen On Higher Initial Jobless Claims

In early trade, NZGBs are 3-4bp richer with the 2/10 curve unchanged. This occurred as US tsy futures remained well supported after the NY bell following higher-than-expected weekly claims of +261k (largest since Dec '21) vs. +235k consensus. Cash US tsys finished 4-9bp richer across the major benchmarks.

• Ahead of next week's ECB policy meeting, the final Q1 estimate of Eurozone GDP has been revised, indicating a contraction of -0.1% (1.0% y/y). Market pricing and analysts are anticipating a 25bp rate hike from the ECB.
• Swap rates are 3-5bp lower with the implied long-end swap spreads tighter.
• RBNZ dated OIS are 1-2bp softer across meetings with the expected terminal rate at 5.64%.
• The local calendar is light today after yesterday’s partial GDP data underwhelmed. Q1 manufacturing volumes fell 2.1% q/q after -4.6% in Q4. Q1 GDP is published on June 15.
• Elsewhere, the Australian calendar is also light today, but China sees the release of May CPI/PPI. The market e expects higher food prices to marginally push up CPI inflation to an anaemic 0.2% annual rate, with weaker commodity prices keeping producer prices in negative territory (-4.3% y/y).