NZGBS: Slightly Cheaper, US Tsys Bear Steepen

In early local trade, NZGBs are 1-2bp cheaper after the US tsy curve steepened, led by higher long-end rates. The 2-year yield was unchanged. US tsys had a whippy session amid modest overall volumes, not unusual for summer trade with many accounts close to the sidelines, awaiting July CPI's this Thursday.

• Morning comments from Fed Bowman: Additional rate increases will likely be needed to lower inflation to target. Will be looking for evidence inflation is on a 'consistent and meaningful' downward path in making decisions.
• Swap rates are 2bp higher.
• RBNZ dated OIS are little changed.
• RBNZ said total new lending rose to NZ$12.2b in June from NZ$10b in May. 79.6% of June new lending was on fixed term with a 1-year term being the most popular.
• In a research paper titled ‘What drives rents in New Zealand?’, the RBNZ found that over the last 20 years, wage rises and the relative supply and demand of homes were the 2 key drivers of rents at both the national and regional level. “When the effect of other factors is excluded, a 1% increase in nominal wages leads directly to a 1% increase in new tenancy rents,” the paper’s authors say.
• The domestic docket is empty today.