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NZGBS: Subdued Return From Christmas Holiday


In local morning trade, NZGBs are flat to 2bps cheaper across benchmarks, with the 2/10 curve flatter. The local market was closed Monday and Tuesday this week for the Christmas holiday period, with little domestic newsflow of note.

  • US tsys twist-flattened overnight, pivoting at the 10s, with yields 3bps higher to 1bp lower. Volumes were light with European exchanges closed for the Boxing Day holiday.
  • Limited reaction, if any after FHFA House Price Index which came in weaker than expected at +0.3% (+0.5% est). S&P CoreLogic CS mildly stronger than expected for m/m (0.64% vs. 0.60% est; y/y 4.87% vs. 4.85% est.).
  • US tsys strengthened after the $57B 2Y note auction traded through, with 4.314% high yield vs. 4.320% WI; 2.68x bid-to-cover vs. 2.54x prior. Indirect take-up climbed back to 61.85% vs. 57.38% prior.
  • US equities were higher in NY on Tuesday across all three major benchmarks, though slightly off their session peaks. The S&P 500 reached as high as 4784.72 before closing at 4774.75; its record high of 4796.56 was set on January 3, 2022.
  • Swap rates are unchanged.
  • RBNZ dated OIS pricing is little changed across meetings.
  • Today, the local calendar is empty.

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