NZGBS: Slightly Cheaper With US Tsys, Fed Williams Weighs

In local morning trade, NZGBs are 1-2bps cheaper mirroring the performance of US tsys on Wednesday. In the NY session, US tsys remained relatively steady, ranging from flat to 2bps cheaper, contributing to a steeper yield curve. The US tsy 10-year closed 2bps higher at 4.03%, sustaining the recent trend of closures above the 4% mark in recent times.

• There was limited US data overnight, with MBA mortgage applications bouncing a seasonally adjusted 9.9% in the week to Jan 5, having fallen -10.7% in the prior, holiday-distorted week. Wholesale inventories were in line at -0.2%, while wholesale trade was lower than expected at 0.0% vs. 0.4%.
• Rates and equities dipped late after New York Fed President John Williams said he expects the central bank to keep a restrictive stance for some time and to begin rate cuts only when confident inflation is moving toward 2% on a sustained basis, also noting a slowing of QT does not seem to be close.
• Markets await US CPI/PPI on Thursday/Friday.
• Oil fell after US inventories unexpectedly swelled 1.34 million barrels, the biggest increase since mid-December, Bloomberg said.
• November's homebuilding approvals fall 10.6% m/m versus +8.5% prior.
• Swap rates are 2-3bps higher.
• RBNZ dated OIS pricing is little changed across meetings.