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BONDS: NZGBS: Richer With US Tsys As AI Stocks Plunge

BONDS
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In local morning trade, NZGBs are 6bps richer after US tsys yields held gains seen in yesterday’s Asian session. Chinese AI startup DeepSeek shook the broader market. 

  • New competition for US AI developers weighed heavily on chip stocks, the tech-heavy Nasdaq falling over 3% and Nvidia down 15%, spurring heavy outright buying and short covering across the board in US tsys.
  • US tsys finished 7-9bps richer, with the belly outperforming.
  • The focus remains on Wednesday's FOMC policy announcement, no move expected, as well as a heavy slate of US corporate earnings Tuesday: PACCAR, Sysco Corp, Synchrony Financial, Lockheed Martin Corp, Veradigm, Royal Caribbean, Polaris Inc., Boeing, NextEra Energy, JetBlue Airways, General Motors, Kimberly-Clark Corp, Invesco, Starbucks, Qorvo and Stryker Corp.
  • NZ-filled jobs rose 0.1% m/m in December versus a revised +0.2% in November.
  • Swap rates are 5-6bps lower.
  • RBNZ dated OIS pricing is 1-6bps softer across meetings with August leading. 48bps of easing is priced for February, with a cumulative 113bps by November 2025.
  • On Thursday, the NZ Treasury plans to sell NZ$200mn of the 1.50% May-31 bond, NZ$200mn of the 4.25% May-36 bond and NZ$100mn of the 1.75% May-41 bond.
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In local morning trade, NZGBs are 6bps richer after US tsys yields held gains seen in yesterday’s Asian session. Chinese AI startup DeepSeek shook the broader market. 

  • New competition for US AI developers weighed heavily on chip stocks, the tech-heavy Nasdaq falling over 3% and Nvidia down 15%, spurring heavy outright buying and short covering across the board in US tsys.
  • US tsys finished 7-9bps richer, with the belly outperforming.
  • The focus remains on Wednesday's FOMC policy announcement, no move expected, as well as a heavy slate of US corporate earnings Tuesday: PACCAR, Sysco Corp, Synchrony Financial, Lockheed Martin Corp, Veradigm, Royal Caribbean, Polaris Inc., Boeing, NextEra Energy, JetBlue Airways, General Motors, Kimberly-Clark Corp, Invesco, Starbucks, Qorvo and Stryker Corp.
  • NZ-filled jobs rose 0.1% m/m in December versus a revised +0.2% in November.
  • Swap rates are 5-6bps lower.
  • RBNZ dated OIS pricing is 1-6bps softer across meetings with August leading. 48bps of easing is priced for February, with a cumulative 113bps by November 2025.
  • On Thursday, the NZ Treasury plans to sell NZ$200mn of the 1.50% May-31 bond, NZ$200mn of the 4.25% May-36 bond and NZ$100mn of the 1.75% May-41 bond.