NZGBS: Yields Higher, Played Catch-Up To Global Bond Cheapening

NZGBs closed 6-11bp cheaper with the 2/10 curve 5bp steeper after it resumed trading after a long weekend.

• Swap rates are 4-6bp higher with implied swap spreads significantly tighter.
• RBNZ dated OIS opened 1-3bp firmer across meetings with May’24 leading.
• On the data front, NZ's commodity export prices rose 0.3% m/m in May versus -1.7% in April, according to ANZ Bank. The index falls 13.3% y/y and 9.9% y/y in NZD terms.
• Bloomberg reports that ASB Bank now expects the NZ economy will avoid a recession this year amid a surge in immigration. ASB expects Q1 economic growth to be flat subject to final partial indicators this week, whereas it previously projected a 0.6% contraction. (link)
• The local calendar tomorrow delivers Mfg Activity (Q1) along with the NZ Government’s 10-month Financial Statement.
• The global calendar is light today with Euro Area Retail Sales (Apr) as the highlight.
• Given that the local market has closed ahead of the RBA policy decision, tomorrow's opening is expected to reflect not only the Australian market's response to the announcement but also any fluctuations in the US tsys overnight.