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BONDS: NZGBs Trade Cheaper, Curve Steepens Tracking US tsys

BONDS
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NZGBs have closed cheaper today with curves steepening after concern over US debt supply and sticky inflation propelled a similar move in Treasuries. Earlier, Trade Balance data showed the deficit had narrowed, while the consumer confidence index rose 0.40% in December, after a 9.4% jump in November.

  • New Zealand's total credit card spending dropped 0.8% m/m to NZ$4.67b in November, reversing October's 1% rise, according to RBNZ data. Domestic billings on New Zealand-issued cards fell 1.3% to NZ$3.97b. On an annual basis, credit card spending declined 3.2%, following a 0.3% increase in October. Separately, total advances outstanding decreased 0.8% m/m and 1.9% y/y to NZ$6.23b in November.
  • New Zealand's trade deficit narrowed to NZ$437m in November from NZ$1.66b in October, driven by a 9.1% rise in exports to NZ$6.5b, led by dairy products and crude oil. Imports fell 3.9% to NZ$6.9b, primarily due to a 32% drop in petroleum imports. Annually, the trade deficit shrank to NZ$8.2b, down from NZ$13.5b a year earlier.
  • US tsys have done very little during the Asian session today, with yields trading flat to 1.1bps lower, as the curve bull-steepens. The US 10yr remains above 4.50% at 4.558% after hitting 4.59% overnight.
  • NZGBs curve has bear-steepened again today, the 2yr still hovers near yearly lows at 3.679%, +0.7bps for the session, while the 10yr is +6.7bps at 4.526% at session highs. The 5s10s is +0.50bps at 56.70 and now trades at its steepest levels for the year and almost 40bps steepening since August.
  • RBNZ dated OIS is pricing in 54.2bps of cut for the Feb meeting, and 101bps of cumulative cuts are now priced in by May. There is a cumulative 123bps of cuts priced in through to October 2025.
  • There is no further data out for New Zealand this year.
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NZGBs have closed cheaper today with curves steepening after concern over US debt supply and sticky inflation propelled a similar move in Treasuries. Earlier, Trade Balance data showed the deficit had narrowed, while the consumer confidence index rose 0.40% in December, after a 9.4% jump in November.

  • New Zealand's total credit card spending dropped 0.8% m/m to NZ$4.67b in November, reversing October's 1% rise, according to RBNZ data. Domestic billings on New Zealand-issued cards fell 1.3% to NZ$3.97b. On an annual basis, credit card spending declined 3.2%, following a 0.3% increase in October. Separately, total advances outstanding decreased 0.8% m/m and 1.9% y/y to NZ$6.23b in November.
  • New Zealand's trade deficit narrowed to NZ$437m in November from NZ$1.66b in October, driven by a 9.1% rise in exports to NZ$6.5b, led by dairy products and crude oil. Imports fell 3.9% to NZ$6.9b, primarily due to a 32% drop in petroleum imports. Annually, the trade deficit shrank to NZ$8.2b, down from NZ$13.5b a year earlier.
  • US tsys have done very little during the Asian session today, with yields trading flat to 1.1bps lower, as the curve bull-steepens. The US 10yr remains above 4.50% at 4.558% after hitting 4.59% overnight.
  • NZGBs curve has bear-steepened again today, the 2yr still hovers near yearly lows at 3.679%, +0.7bps for the session, while the 10yr is +6.7bps at 4.526% at session highs. The 5s10s is +0.50bps at 56.70 and now trades at its steepest levels for the year and almost 40bps steepening since August.
  • RBNZ dated OIS is pricing in 54.2bps of cut for the Feb meeting, and 101bps of cumulative cuts are now priced in by May. There is a cumulative 123bps of cuts priced in through to October 2025.
  • There is no further data out for New Zealand this year.