NZGBS: Richer With US Tsys, US JOLTS Soft, Syndicated Tap Of May-28

In local morning trade, NZGBs are 3-5bps richer after US tsys rallied for the fourth successive day following softer-than-expected US labour market data. However, US tsys did finish slightly off session highs amid late position squaring ahead today’s ADP private employment data risk, a precursor to Friday's headline employment report.

• JOLTS Job Openings printed 8.059M vs. 8.350M est and 8.488M prior. The result was the lowest since Feb 2021.
• US late-year rate cut projections continued to gain vs. late Monday levels: Sep'24 cumulative -19.3bps (-17.2bps), Nov'24 cumulative -27.8bps (-25.3bps), Dec'24 -44.3bps (-40.6bps).
• Financial statements for the 10 months ended April 30 showed an Operating Deficit before gains and losses of NZ$6.51b, NZ$1.71b narrower than the gap projected in the May 30 budget.
• Terms of trade rose 5.1% q/q (estimate +3.2%) in 1Q.
• Swap rates are 2-4bps lower, with the 2s10s curve flatter.
• RBNZ dated OIS pricing is 1-4bps softer for meetings beyond October. A cumulative 23bps of easing is priced by year-end.
• Today, the NZ Treasury plans to sell NZ Treasury has launched the syndicated tap of May 2028 nominal bonds, seeking at least NZ$2bn this week. Transaction will be capped at NZ$4bn and priced on June 6. Initial guidance 3-6 bps under April 2027 nominal bond. The June 6 bond auction is cancelled.