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NZGBS Slightly Cheaper, Curve Steeper Ahead Of Budget On Thursday

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in local morning trade, NZGBs are slightly cheaper, with the curve steeper. US cash trading was closed on Monday for memorial day, while US bond futures are a touch higher with the long-end slightly outperforming the US 2y10y curve closed Friday at it's most inverted level for the year.

  • The NZGB curve is steeper, the 2Y +0.6bps at 4.884%, 10Y is +0.7bps at 4.779%. While the US-NZ 2Y swap is -21bps, off yearly highs -5.5bps made earlier this month.
  • NZGBS yields are 15-20bps higher since the hawkish RBNZ last week, with the NZ budget to come on Thursday the RBNZ sent a clear warning they don't want to see anything inflationary.
  • The RBNZ will implement Debt-to-Income (DTI) restrictions starting July 1, limiting high-DTI lending by banks. The restrictions apply to new residential property loans for both owner-occupiers and investors.
  • Filled jobs rose 0.1% m/m in April, vs a revised 0.3% rise in March down from 0.4%. Filled jobs rose to 2.404m from a revised 2.402m
  • Swap rates are unchanged
  • RBNZ dated OIS pricing is unchanged. A cumulative 21bps of easing is priced by year-end.
  • Looking Ahead: ANZ Business Confidence & Activity Outlook On Wednesday
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in local morning trade, NZGBs are slightly cheaper, with the curve steeper. US cash trading was closed on Monday for memorial day, while US bond futures are a touch higher with the long-end slightly outperforming the US 2y10y curve closed Friday at it's most inverted level for the year.

  • The NZGB curve is steeper, the 2Y +0.6bps at 4.884%, 10Y is +0.7bps at 4.779%. While the US-NZ 2Y swap is -21bps, off yearly highs -5.5bps made earlier this month.
  • NZGBS yields are 15-20bps higher since the hawkish RBNZ last week, with the NZ budget to come on Thursday the RBNZ sent a clear warning they don't want to see anything inflationary.
  • The RBNZ will implement Debt-to-Income (DTI) restrictions starting July 1, limiting high-DTI lending by banks. The restrictions apply to new residential property loans for both owner-occupiers and investors.
  • Filled jobs rose 0.1% m/m in April, vs a revised 0.3% rise in March down from 0.4%. Filled jobs rose to 2.404m from a revised 2.402m
  • Swap rates are unchanged
  • RBNZ dated OIS pricing is unchanged. A cumulative 21bps of easing is priced by year-end.
  • Looking Ahead: ANZ Business Confidence & Activity Outlook On Wednesday