NZGBS: Slightly Cheaper, Subdued NY Session For US Tsys, RBA & BoJ Policy Decisions

In local morning trade, NZGBs are 1bp cheaper after US tsys finished the NY session flat to 2bps cheaper. Further slippage in Fed rate cut expectations, ahead of Wednesday’s FOMC meeting, generated some selling pressures for US tsys. Corporate issuance was also touted as a driver for today's sell-off. That said, volumes were light.

• The US 2- and 5-year yields made fresh YTD highs, with the 10-year stopping just shy of its high of 4.3486%.
• US equities bounced but pared the early rally. They continue to ignore the evolving Fed outlook and instead re-focused on tech. A Bloomberg report that Apple is in talks to build Google's Gemini AI engine into the iPhone boosted risk appetite.
• Swap rates are 1bp higher.
• RBNZ dated OIS pricing is little changed. A cumulative 57bps of easing is priced by year-end.
• Today, the local calendar is empty. In Australia, the RBA hands down its Policy Decision. Consensus among Bloomberg analysts is unanimous in expecting a status quo decision.
• Elsewhere, the BoJ delivers its Policy Decision, with Nikkei adding to recent reports across multiple newswires that the central bank is to end YCC and ETF purchases along with the heavily sourced exit of negative interest rates.