CANADA JULY CPI +2.5% YOY, SLOWEST SINCE MARCH 2021

MNI China Daily Summary: Tuesday, Aug 20

China Repo Rates Rise On Tuesday

MNI: PBOC Net Drains CNY236.6 Bln via OMO Tuesday

MNI: PBOC Sets Yuan Parity Lower At 7.1325 Tues; +2.12% Y/Y

EZ/UK Bond Supply Calendar: UK, Germany Auction on Wednesday

MNI: US REDBOOK: AUG STORE SALES +4.8% V YR AGO MO

MNI: US AUG PHILADELPHIA FED NONMFG INDEX -25.1

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

NZGBS: Short-End Rally Steepens Curve, Equity & USDJPY Weakness Supportive

BONDS
Homepagemarkets-real-timeBulletMarketsFixed Income Bullets

NZGBs closed on a strong note, with benchmark yields 4bps lower to 1bp higher. The 2/10 curve steepened.

  • Given the lack of domestic news flow, equity weakness in today’s Asia-Pac session looks to have assisted short-end outperformance.
  • “The New Zealand economy will expand 0.8% in 2024, 2.2% in 2025 and 2.7% in 2026, according to a survey conducted by Bloomberg News. The chance of a recession happening over the next 12 months is 32 per cent, according to 8 respondents.”
  • Andrew Vogel, an economist at S&P Global: “New Zealand saw a notable improvement in exports, and slightly better-than-expected growth in private consumption most recently, balanced by weakening fixed investment and still-high import spending. Still, the signs for the underlying strength of the economy are good, and the recession probability is gradually shrinking.” (See link)
  • The swap curve has bull-steepened, with rates 1-8bps lower.
  • RBNZ dated OIS pricing closed 3-7bps softer across meetings. A 53% chance of a cut in August is priced, with a cumulative 91% priced by October. A cumulative 74bps of easing is priced by year-end.
  • Tomorrow, the local calendar is empty again.
  • Tomorrow, the NZ Treasury plans to sell NZ$300mn of the 3.0% Apr-29 bond and NZ$200mn of the 4.50% May-35 bond.
203 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.

NZGBs closed on a strong note, with benchmark yields 4bps lower to 1bp higher. The 2/10 curve steepened.

  • Given the lack of domestic news flow, equity weakness in today’s Asia-Pac session looks to have assisted short-end outperformance.
  • “The New Zealand economy will expand 0.8% in 2024, 2.2% in 2025 and 2.7% in 2026, according to a survey conducted by Bloomberg News. The chance of a recession happening over the next 12 months is 32 per cent, according to 8 respondents.”
  • Andrew Vogel, an economist at S&P Global: “New Zealand saw a notable improvement in exports, and slightly better-than-expected growth in private consumption most recently, balanced by weakening fixed investment and still-high import spending. Still, the signs for the underlying strength of the economy are good, and the recession probability is gradually shrinking.” (See link)
  • The swap curve has bull-steepened, with rates 1-8bps lower.
  • RBNZ dated OIS pricing closed 3-7bps softer across meetings. A 53% chance of a cut in August is priced, with a cumulative 91% priced by October. A cumulative 74bps of easing is priced by year-end.
  • Tomorrow, the local calendar is empty again.
  • Tomorrow, the NZ Treasury plans to sell NZ$300mn of the 3.0% Apr-29 bond and NZ$200mn of the 4.50% May-35 bond.