MNI China Daily Summary: Friday, January 10

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BONDS: NZGBs Trade Cheaper, Curve Steepens, Trade Deficit Narrows

BONDS
BulletMarketsFixed Income Bullets
  • NZGBs yields have opened cheaper this morning, underperforming moves in the US tsys market. Overnight we had initial jobless claims, final GDP growth and Q3 core PCE prices although this had limited impact on market pricing, however they were were all on the stronger side of expectations, offset somewhat by a weak Philly Fed manufacturing index.
  • New Zealand's trade deficit narrowed sharply to NZ$437m in November, down from NZ$1.658b in October. This improvement was driven by a rise in exports to NZ$6.48b and a decline in imports to NZ$6.92b. The ytd trade deficit also narrowed to NZ$8.246b from NZ$9.068b in October.
  • New Zealand's consumer confidence rose to 100.2 in December, marking the first optimistic reading since September 2021. Two-year inflation expectations fell to 3.8%, and fewer consumers view it as a bad time to make major purchases. While still cautious, sentiment has significantly improved, supported by lower interest rates beginning to take effect.
  • NZGBs are trading flat to 5.5bps cheaper this morning, with the curve bear-steepening. The 2yr is +0.6bps at 3.678%, while the 10yr is +4.8bps at 4.507%. The 3s10s curve now at its steepest for the year, rising 4.3bps to 77.30 and now up about 25bps this month.
  • Swaps are trading unchanged this morning
  • RBNZ dated OIS firmed 7bps to 53bps on Thursday for the Feb meeting, while the April meeting is now pricing in 82bps of cumulative priced while there is a cumulative 123bps of cuts priced in through to Nov 2025.
  • There is nothing else on the local calendar today
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  • NZGBs yields have opened cheaper this morning, underperforming moves in the US tsys market. Overnight we had initial jobless claims, final GDP growth and Q3 core PCE prices although this had limited impact on market pricing, however they were were all on the stronger side of expectations, offset somewhat by a weak Philly Fed manufacturing index.
  • New Zealand's trade deficit narrowed sharply to NZ$437m in November, down from NZ$1.658b in October. This improvement was driven by a rise in exports to NZ$6.48b and a decline in imports to NZ$6.92b. The ytd trade deficit also narrowed to NZ$8.246b from NZ$9.068b in October.
  • New Zealand's consumer confidence rose to 100.2 in December, marking the first optimistic reading since September 2021. Two-year inflation expectations fell to 3.8%, and fewer consumers view it as a bad time to make major purchases. While still cautious, sentiment has significantly improved, supported by lower interest rates beginning to take effect.
  • NZGBs are trading flat to 5.5bps cheaper this morning, with the curve bear-steepening. The 2yr is +0.6bps at 3.678%, while the 10yr is +4.8bps at 4.507%. The 3s10s curve now at its steepest for the year, rising 4.3bps to 77.30 and now up about 25bps this month.
  • Swaps are trading unchanged this morning
  • RBNZ dated OIS firmed 7bps to 53bps on Thursday for the Feb meeting, while the April meeting is now pricing in 82bps of cumulative priced while there is a cumulative 123bps of cuts priced in through to Nov 2025.
  • There is nothing else on the local calendar today