NZGBS: Slightly Richer After A Small Post-CPI Rally In US Tsys

In local morning trade, NZGBs are flat to 3bps richer across benchmarks after US tsys showed only small net movements on the day following an in-line US CPI print. The US 2-year finished 2bps cheaper at 4.73%, while the 10-year was 3 bps lower at 4.20%.

• US CPI inflation ticked higher in November, with the headline rising 0.1% m/m and the core rising 0.3% m/m. Annual headline inflation ticked down to 3.1% and core annual inflation was steady at 4.0%.
• Focus now turns to today's PPI data, ahead of the FOMC rate decision at 1300ET and Fed Chair Powell's presser at 1430ET. The Fed will likely lower its median "dot plot" estimate for policy interest rates at the end of 2024 to around 4.9%, former officials and staffers told MNI, as expectations build for the first rate cut to come as early as the first half of the year.
• The Q3 Current Account Deficit widened more than economists expected printing NZ$11.465b (estimate -NZ$11.000b) from a revised -NZ$4.652b in Q2.
• NZ's home sales rose 12.2% y/y in November, according to the REINZ.
• Swap rates are 1-4bps lower, with the 2s10s curve flatter.
• RBNZ dated OIS pricing is little changed across meetings out to Oct’24 and 4bps softer beyond.