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NZGBS: Weaker After Subdued Trade in U.S. Tsys

BONDS

NZGBs are 2-3bp cheaper following the modestly weaker lead from U.S. Tsys in NY trade. The lack of news overnight saw calmer market conditions amid an ongoing focus on bank risk. U.S. equity indices were modestly weaker after bank stocks rebounded offsetting early losses associated with news that President Biden and House Speaker McCarthy continue to decline to meet for debt limit negotiations.

  • Swaps are 4bp cheaper, implying wider swap spreads.
  • RBNZ dated OIS are 1-8bp firmer across meetings beyond April with Feb-24 leading. Terminal rate expectations rise to 5.22% with 23bp of tightening priced for April.
  • Released already today, Westpac/McDermott Miller Employment confidence index rose 1.5 points to 109.5.
  • RBNZ announced that it sought feedback on the proposed guidance for the financial sector on managing climate-related risks.
  • With no major local data today, attention will turn to the release of Australian CPI Monthly for February today. BBG consensus is expecting another slowing in the Y/Y rate to 7.2% from 7.4% in January and 8.4% in December.
  • The NZ Treasury announced the tender schedule for April with the following slated for Wednesday next week (April 5): NZ$200mn of the 15 May 2026 bond, NZ$150mn of the 15 May 2034 bond and NZ$50mn of the 15 May 2041 bond.

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