NZGBS: Slightly Weaker, US Tsy 10-year Yield Higher

NZGBs opened 3bp weaker with the 2/10 curve little changed. US Tsy 10-yield was 5bp higher despite the generally risk-off tone in the markets. Trading desks cited US Government’s unwillingness to intervene on First Republic for a mid-session cheapening in US Tsys. The relatively tight range in NY may reflect an unwillingness of market participants to position aggressively ahead of PCE deflator data on Friday.

• Swap rates opened 3bp higher with implied swap spreads unchanged.
• RBNZ dated OIS opened unchanged across meetings with 19bp of tightening priced for the May meeting. Terminal OCR expectations sit at 5.48%.
• The ANZ Business Outlook is slated for release today with the survey likely to show overall business conditions remaining weak. Inflation expectations and pricing will attract the market’s attention as it seeks confirmation that inflation has peaked.
• In Australia, Export and Import Prices are slated for release.
• Further afield, China's March Industrial Profits are due for release ahead of Q1 US GDP.
• The NZ Treasury plans to sell NZ$200mn of the 0.25% 15 May 2028 bond, NZ$150mn of the 3.50% 14 April 2033 bond and NZ$50mn of the 2.75% 15 May 2051 bond.