NZGBS: Subdued Dealings Ahead Of Key US Data

NZGBs closed near the session’s worst levels, with benchmarks flat to 3bps cheaper. Nevertheless, with the domestic calendar light, dealings have been subdued ahead of key US data.

• There is a heavy US data drop in today’s shortened session ahead of tomorrow’s 4^th of July holiday: Challenger Job Cuts, ADP Employment, Weekly Jobless claims, ISM Services, Factory/Durables Orders and June FOMC Minutes. Friday will see June Non-Farm Payroll data.
• US tsys are little changed in today's Asia-Pac session after yesterday's Powell-induced rally.
• NZ-US and NZ-AU 10-year yield differentials are little changed versus yesterday’s close.
• NZ commodity export prices rose 1.5% from a month earlier in June (+7.4% y/y), with dairy seeing the largest increase (+2.2% m/m, +8.2% y/y).
• The swaps curve has twist-steepened, with rates 2bps lower to 1bp higher.
• RBNZ dated OIS pricing closed 2-4bps softer for meetings beyond July. A cumulative 36bps of easing is priced by year-end.
• Tomorrow, the local calendar will see CoreLogic House Prices and the Government’s 11-month Financial Statements.
• Tomorrow, the NZ Treasury plans to sell NZ$225mn of the 1.5% May-31 bond, NZ$175mn of the 4.25% May-34 bond and NZ$100mn of the 1.75% May-41 bond.