NZGBS: Subdued Open, U.S. Tsys Modestly Weaker

NZGBs open 1-3bp cheaper after U.S Tsys close moderately weaker, near the middle of a relatively narrow range in NY trade. There was little reaction to Fed Chair Powell’s lunch with the Republican Study Committee where he cited Fed forecasts of one more hike this year.

• 2s10s swaps curve opens 2bp flatter with rates flat to 2bp higher.
• A subdued open for RBNZ dated OIS with pricing flat to 6bp firmer across meetings with Feb-24 leading. April meeting is priced for a 25bp hike with terminal OCR expectations at 5.24%.
• The local calendar is scheduled to release today Building Consents for February and ANZ Business Confidence for March. Building consents should confirm a trend softening due to a tightening in financial conditions. Business sentiment should also reflect a worsening economic outlook. The focus however is likely to be on the pricing and cost components.
• Elsewhere, the SEEK Advertised Salary Index (Feb) grew by 4.4% in the year to February 2023, close to the fastest growth recorded in the data set beginning in 2016.
• The NZ Treasury is scheduled to sell today NZ$200mn of the 0.25% 15 May 2028 bond, NZ$150mn of the 3.5% 14 April 2033 bond and NZ$50mn of the 2.75% 15 May 2051 bond.