NZGBS: Slightly Cheaper, US President Bidens Bows Out Of November Election Race

In local morning trade, NZGBs are 3bps cheaper after US President Biden pulled out as the Democratic candidate for November’s election.

• There have been reports that former President Obama and senior leader Pelosi told him privately that it was time. Biden has endorsed VP Harris, but it is not a given that she will automatically be the party’s candidate. She will still need to have the endorsement of at least 1976 delegates at August’s Democratic Convention. Market moves in reaction to the news have been muted so far, as speculation that Biden would step aside has been growing over recent weeks.
• On Friday, US equities and bonds posted broad declines to finish a volatile week. The tech-heavy Nasdaq 100 slid around 1%, while US tsys finished ~4bps cheaper.
• There was no data or obvious headline driver for the break lower on Friday. NY Fed Williams said the monetary policy panel discussion didn't break any new ground ahead of tonight's policy blackout that runs through August 1.
• NZ's trade surplus widened to NZ$699m in June from a revised +NZ$54m in May.
• Swap rates are 1-2bps higher, with the 2s10s curve steeper.
• RBNZ dated OIS pricing is little changed. A cumulative 67bps of easing is priced by year-end.