NZGBS: Subdued Open As U.S. Tsys Digest Fed Chair’s Testimony (Part II)

NZGBs open 1-2bp stronger with the 2/10 curve slightly flatter as U.S Tsys close weaker in NY trade but off yield highs set in Asia-Pac trade. In his second appearance before Congress Fed Chair Powell reiterated Tuesday's hawkish message but added a data dependency caveat citing the importance of non-farm payrolls this week and the CPI next. U.S Tsy yields moved 1-5bp higher on with the curve more inverted (in line to slightly richer vs. levels seen late in the NZ session on Weds). The cash NZ/US 10-year yield differential is 1bp narrower at +60bp.

• Swap rates are 3-4bp lower, implying tighter swap spreads, while the curve is little changed.
• RBNZ-dated OIS opens little changed across meetings. April meeting pricing shows ~45bp of tightening, with terminal OCR pricing now holding well above the RBNZ’s projected OCR peak of 5.50% at ~5.62%.
• RBNZ Deputy Governor Hawkesby will speak at a private event today, commenting on the recent monetary policy decision (no new information will be divulged).
• Total card Spending for February resided in negative territory, with Cyclone Gabrielle impacting the result.
• Further afield, China CPI and PPI data for February are slated for today.