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BONDS: NZGBS: Twist-Steepener Ahead Of US Payrolls

BONDS
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NZGBs closed showing a twist-steepener, with benchmark yields 1bp lower to 2bps higher. With the domestic calendar empty today, price action has been driven by global bonds ahead of key US employment later today. 

  • Cash US tsys are little changed in today’s Asia-Pac session ahead of US Payrolls data. Payroll growth is expected to bounce sharply to 215k in November after October’s strike and weather-related disruption.
  • Analysts are split on whether to call for a 4.1% or 4.2% unemployment rate in November after the 4.145% in October. The FOMC’s dovish shift to a 4.4% forecast for 4Q24 will likely be undershot.
  • We expect a soft payrolls report to cement expectations of a 25bp cut from the FOMC on Dec 18 (currently 18.5bp priced) whilst a strong report would see next week’s CPI as the decider. (See MNI US Payrolls Preview here)
  • The Federal Reserve enters its self-imposed blackout period at midnight today through December 19.
  • Swap rates closed 1-2bps higher.
  • RBNZ dated OIS pricing closed 1-2bps firmer. 43bps of easing is priced for February, with a cumulative 105bps by November 2025.
  • On Monday, the local calendar is empty, with the next key release being Mfg Activity Volume on Wednesday.
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NZGBs closed showing a twist-steepener, with benchmark yields 1bp lower to 2bps higher. With the domestic calendar empty today, price action has been driven by global bonds ahead of key US employment later today. 

  • Cash US tsys are little changed in today’s Asia-Pac session ahead of US Payrolls data. Payroll growth is expected to bounce sharply to 215k in November after October’s strike and weather-related disruption.
  • Analysts are split on whether to call for a 4.1% or 4.2% unemployment rate in November after the 4.145% in October. The FOMC’s dovish shift to a 4.4% forecast for 4Q24 will likely be undershot.
  • We expect a soft payrolls report to cement expectations of a 25bp cut from the FOMC on Dec 18 (currently 18.5bp priced) whilst a strong report would see next week’s CPI as the decider. (See MNI US Payrolls Preview here)
  • The Federal Reserve enters its self-imposed blackout period at midnight today through December 19.
  • Swap rates closed 1-2bps higher.
  • RBNZ dated OIS pricing closed 1-2bps firmer. 43bps of easing is priced for February, with a cumulative 105bps by November 2025.
  • On Monday, the local calendar is empty, with the next key release being Mfg Activity Volume on Wednesday.