NZGBS: Slightly Richer As US Tsy Yields Hover At Cycle Highs

In local morning trade, NZGBs are 2bps richer as US tsys finished mixed with moderate ranges on decent volume. US tsy yields remain near cycle highs, with the 10-year hovering just below its highest level since 2007. The 10-year yield was 8bps lower in early trade before selling resumed, leaving it unchanged at 4.54%. This was despite weaker-than-expected data. New Home Sales printed 675k vs. 699k est. (prior up revised to 739k from 714k) and Consumer Confidence showed 103 vs. 105.5 est.

• AFR reports that Bank of America’s data analytics team said: “We view last week’s [Fed policy meeting] as corroborating our thesis that, with economic uncertainty so high and policymakers so data-dependent, the Fed would err on the side of doing too much rather than too little - keeping policy tighter for longer until certain that inflation is dead.
• Swap rates are unchanged.
• RBNZ dated OIS pricing is little changed.
• NZ’s ruling Labour Party, which is trailing in opinion polls ahead of the Oct. 14 election, releases its fiscal plan. (See link)
• Today the local calendar is empty today.
• Yesterday, the NZ Treasury made an announcement regarding October 2023, revealing plans for four NZGB tenders, each with a size of NZ$500mn.