NZGBS: Slightly Cheaper Ahead Of AU Q2 CPI & FOMC

In early local trade, NZGBs are 1-2bp cheaper after a relatively subdued NY session ahead of key central bank meetings. US tsys finished 1-2bp cheaper after paring early losses after news that Banc of California is in advanced talks to buy PacWest. The news drove the KBW banking index to session lows and saw PACW shares at one point fall 27%. The early drop in US tsys was driven by positive developments, including upward revisions to the IMF’s global growth and core CPI forecasts in its updated WEO, alongside strong data releases. Notably, house prices surpassed expectations, and the Conference Board's consumer survey showed a robust increase in consumer sentiment.

• Swap rates are 4-5bp higher.
• RBNZ dated OIS pricing is flat to 3bp firmer across meetings.
• Australian PM Albanese is heading to Wellington for defence and economic talks with his NZ counterpart Chris Hipkins.
• With the local calendar empty today, the focus will be firmly on Australia’s Q2 CPI. The next key domestic release is ANZ Consumer Confidence (Jul) on Friday.
• NZ Treasury plans five nominal bond auctions in August. Each weekly auction will offer NZ$500m bonds. Subject to demand and market conditions offers of inflation-indexed bonds will be made Aug 10 and Aug 24.