NZGBS: Under Pressure, Payside Swap Flow Noted

NZGBs could never shake off the downward bias established at Wednesday’s open, as catch up to weakness in U.S. Tsys either side of the Christmas break & the latest roll back of Chinese COVID restrictions (most notably re: international travel), as well as some fresh downward impetus for core global FI markets in Asia-Pac hours, all applied pressure.

• That left the major NZGB benchmarks running 9-13bp cheaper across the curve at the bell, with the belly leading the weakness.
• Meanwhile, payside flow in swaps helped apply pressure, with the major swap rates running 14-22bp higher as that curve bear steepened and swap spreads widened.
• There wasn’t anything in the way of meaningful domestic headline flow observed,
• The local docket is empty in the time between Christmas and the New Year, which will leave broader macro headlines and spill over from wider cross-market flows at the fore in the coming days.