NZGBS: Slightly Cheaper After A Twist-Flattening For US Tsys Ahead Of FOMC Decision

In local morning trade, NZGBs are flat to 2bps cheaper across benchmarks after US tsys twist-flattened, with yields 2bps higher to 6bps lower, following a cut in the US Tsy’s borrowing estimate from $816B to $760B late Monday with a focus on tomorrow's TBAC refunding announcement at 0830ET. The FOMC Policy Decision is due Thursday morning local time.

• Early in the NY session, support evaporated, particularly in the short end, after higher-than-expected JOLTS job openings at 9.026m (cons 8.75m) in December after an upward revised 8.93m (initial 8.79m) in November.
• Meanwhile, the US Conference Board consumer confidence figure may have been in line with expectations in January but the labour market differential increased strongly. It increased from 27.3 to 35.7 for its highest level since April, whilst the 8.4pt increase was the strongest monthly increase since May’21.
• Commerce and Consumer Affairs Minister Andrew Bayly says NZ is to reform financial services regulations for clarity. (See Bloomberg link)
• The swaps curve has twist-flattened, with rate movements bounded by +/- 2bps.
• RBNZ dated OIS pricing flat to 2bps firmer. A cumulative 96bps of easing is priced by year-end.
• Today, the local calendar will see ANZ Business Confidence. Australia sees the release of Q4 CPI data.