NZGBs Slightly Cheaper, Trade Balance Narrowed, Conway To Speak Tuesday

NZGBs did very little on Friday closing in line with opening levels, yields were 1-3bps higher and curves bear flattened. Earlier NZ trade balance data was released showing an improvement to the deficit at -NZ$218m from a revised -NZ%1,089m in Jan. The 12-month deficit is steadily improving from mid-2023 lows, near -NZ$17bn to now just under -NZ$12bn.

• (Bloomberg) -- Recession Is Back, Soft Path to Drive RBNZ Pivot. NZ has entered a recession as GDP fell 0.1% in Q4 2023, driven by declines in residential construction and inventories, while per-capita GDP also decreased for the fifth consecutive quarter, signalling challenges for the economy despite expectations of gradual recovery in 2024 amid significant monetary policy tightening. (See link)
• Swap rates closed flat to 1.5bps lower, with the 2s10s curve flatter.
• The NZ trade weight Index made new yearly lows down 0.61% to 70.73, while the AU-NZ 2yr swap is just off monthly highs at -0.81, the NZD is down 0.46% to 0.6018, while Equities finished up 0.48%.
• RBNZ dated OIS has edged lower again with pricing 3bps softer for meetings beyond October. A cumulative 76bps of easing is priced by year-end.
• Next Week: RBNZ's Conway speaks about Feb MPS on Tuesday, while ANZ consumer Confidence on Wednesday