NZGBS: Sharply Cheaper As Oil, Economic Data & Fed Kashkari Pressure US Yields Higher

In local morning trade, NZGBs are 5-8bps cheaper as US tsys push sharply higher to fresh cycle highs. US tsys bear-flattened, with yields 4-8bps higher.

• Several factors underpinned the move. Oil pushed higher, with WTI hitting its highest point in more than a year. Durable goods topped estimates and Fed Kashkari threw weight behind the FOMC's higher-for-longer stance. Indeed, Kashkari reiterated his earlier views that the Fed may have to do more than one further hike.
• Additionally, investors may have shed US tsys as Moody's warning that a government shut down could negatively impact credit ratings rang more loudly as the potential for a shutdown on Saturday neared.
• Swap rates are 5-8bps higher, with the 2s10s steeper.
• RBNZ dated OIS pricing is slightly firmer across meetings, with terminal OCR expectations at 5.76%.
• Today the local calendar sees the release of ANZ Business Confidence.
• Today the NZ Treasury plans to sell NZ$225mn of the 3.0% Apr-29 bond, NZ$200mn of the 4.25% May-34 bond and NZ$75mn of the 2.75% May-51 bond.