NZGBS: Slightly Cheaper, Subdued Start To Week For US Tsys

In local morning trade, NZGBs are slightly cheaper after US tsys finished the NY session with a modest cheapening. Yields ended ~1bp higher after being ~2bps lower during the Asian session on the back of news that President Biden was pulling out of the election race.

• It seems very likely that Kamala Harris will be the Presidential Nominee for the Democrats with the focus now turning to her running mate, betting markets have Josh Shapiro as the favourite with a 32% chance followed by Andy Beshaer at 26% and Roy Cooper at 20%.
• There weren’t any major headlines causing the sell-off with some desks citing incoming Treasury coupon supply (2s, 5s, 7s and 2Y FRN) or possibly some hedging.
• Today, the US calendar will see Regional Fed and Existing Home Sales data and a $69bn 2Y Note auction.
• Swap rates are flat to 1bp higher.
• RBNZ dated OIS pricing is little changed, with a 39% chance of a cut in August priced. There is an 82% chance of a cut priced by October, with a cumulative 68bps of easing by year-end.
• Today, the local calendar is empty.