NZGBS: Subdued Session But Closed On A Positive Note

NZGBs closed on a strong note, with the benchmarks flat to 2bps richer on the day. The 2/10 curve finished flatter. The session was however subdued, with ranges narrow, after today’s domestic newsflow failed to provide a market-moving event.

• In addition to the previously outlined softer-than-expected 3Q Construction Work Done, the NZ Treasury published financial statements for the three months ended Oct. 31. These showed an operating deficit of NZ$3.85bn. The deficit was NZ$91m wider than projected in the pre-election fiscal update. (See Bloomberg link)
• Also potentially keeping local participants on the sidelines was the fact that the RBA Policy Decision coincided with the local market closing. The post-decision rally in ACGBs will therefore be reflected at tomorrow’s local market open.
• The swaps curve twist-flattened, with rates 2bps lower to 3bps higher.
• RBNZ dated OIS pricing is little changed.
• Tomorrow, the local calendar is empty.
• Later today, the US calendar sees ISM Services and JOLTS Job Openings.