NZGBS: Slightly Despite US Tsys Bull Steepening Overnight, Dovish Comments From ECB

In local morning trade, NZGBs are flat to 1bp richer despite US tsys’s bull steepening overnight. US tsy yields were 4-9bps richer despite Q4 GDP printing 3.3% annualised growth, well above the consensus of 2.0%. Initial Jobless Claims increased by 25k last week to 214k, suggesting that the previous week’s low was exaggerated by seasonal effects.

• US Treasury Secretary Yellen said on Thursday that surprisingly strong economic growth in the fourth quarter was a "good thing" that signals continued healthy consumer spending without increases in inflationary pressures.
• US tsys were also buoyed by comments from ECB policymakers that they were open to starting a discussion about future rate cuts in March if data points to inflation hitting 2% this year. A March pivot would pave the way for rate cuts, most likely in June - Reuters News.
• RBNZ Chief Economist Conway will deliver a keynote speech on 30 January. The speech will focus on the significant changes to the global economy since the COVID-19 pandemic. He will also make brief comments on domestic data developments since the November Monetary Policy Statement.
• Swap rates are 2bps lower.
• RBNZ dated OIS pricing is flat to 4bps softer across meetings, with November leading.
• Today, the local calendar is empty, and Australia is out for a public holiday.