NZGBS: Slightly Cheaper Despite A Bull Steepening For US Tsys

In local morning trade, NZGBs are slightly cheaper despite a bull steepening of the US tsy curve in the NY session. US tsys finished at or near session bests, with yields 2-8bps lower. The 10-year yield climbed to a new 16-year high in a volatile morning session on heavy volume. US data was mixed. Weekly Claims printed lower than expected (204k vs. 215k est), but the GDP Price Index was lower than expected (1.7% vs. 2.0% est), Personal Consumption missed (0.8% vs. 1.7% est) and Pending Home Sales were below estimates: MoM (-7.1% vs. -1.0% est).

• The US tsy curves steepened as Bunds, Gilts and JGBs joined the sovereign selloff, one desk noted. "Markets are either believing CBs higher for longer rhetoric or perhaps doubting the resolve to cause the pain needed to bring inflation down to target levels."
• Little reaction to Fed Goolsbee's comments that the Fed can generate a rare soft landing, while a "China slowdown, higher oil prices, government shutdown" are all risks to the outlook.
• ANZ Consumer Confidence rose 1.6% m/m in August. This was the highest read since January 2022.
• Swap rates are 1bp higher.
• RBNZ dated OIS pricing is little changed across meetings.
• The local docket is empty for the remainder of today.