NZGBS: Very Strong Close, Outperformed The $-Bloc

NZGBs closed on a solid note, with benchmark yields 9-10bps lower. This came despite the local calendar being empty and US tsys dealing cheaper in today’s Asia-Pac session.

• US tsys are 1-2bps cheaper most likely in response to higher oil prices following US missile strikes in response to Houthi attacks.
• The NZGB 10-year managed to outperform its $-bloc counterparts, with the NZ-US and NZ-AU 10-year yield differentials 3-4bps tighter.
• Swap rates closed 8-12bps lower, with the 2s10s curve steeper.
• RBNZ dated OIS pricing closed 1-11bps softer across meetings, with November leading. A cumulative easing of 96bps is priced by November.
• House sales provisionally fell to a record low in the three months through September, according to CoreLogic NZ.
• Next week, the local calendar is empty on Monday but sees the NZIER Business Opinion Survey on Tuesday. Card spending data is on Wednesday.
• The market awaits US PPI data later today. MN Fed President Kashkari also speaks about economic conditions.