NZGBS: Subdued Open, US Tsys Little Changed, Building Permits Due

In early local trade, NZGBs are little changed after a US tsys finished the NY session basically unchanged. Fed Goolsbee noted that lower inflation is positive but that he hadn't decided whether to support pausing rates at the next policy meeting on September 19-20. Fed Kashkari was also non-committal on the September decision but sounded a more upbeat tone on the US economic and inflation outlook despite the expectation that job losses would mount with central bank tightening. Market pricing for the Fed is steady with around 11bp of rate hike premium priced over the next two policy meetings.

• Swap rates are little changed.
• RBNZ dated OIS pricing is flat across meetings with terminal OCR expectations at 5.67%.
• Today the local calendar sees June Building Permits with tighter financial conditions still likely to weigh despite strong population growth and signs of recovery in housing prices. Yesterday, residential property listings were the lowest for the month of July since records began in 2007 as economic uncertainty causes vendors to hold onto their homes, according to realestate.co.nz.
• The antipodean calendar highlight today however will likely be the RBA Policy Decision. Bloomberg consensus expects a 25bp hike to 4.35%, but the decision is generally seen as a line ball.