NZGBS: Yields Lower, US Tsys Richer, House Price Decline Slows

NZGBs are 0-2bp richer as US tsy yields decline by 3-7bp across major benchmarks. The session did see volatility after a downside miss for MNI Chicago PMI, higher than expected JOLTS job openings and then Jefferson (voter) and Harker ('23 voter) showing support for skipping a June hike.

• Swap rates are 1-3bp lower with implied short-end swap spreads slightly tighter.
• RBNZ dated OIS are little changed across meetings with an expected terminal OCR of 5.60%.
• Based on CoreLogic's data, the rate of decline in New Zealand house prices showed a further slowdown in May, aligning with signals from the central bank that it may have reached the end of its 18-month cycle of policy tightening. House values decreased by 10.2% compared to the previous year, a slight improvement from the 10.3% decline in April and 10.5% in March. On a monthly basis, prices dropped by 0.7%. (link)
• The local calendar is light tomorrow ahead of Q1 data for the Terms of Trade and Volume of All Buildings on Friday.
• The NZ Treasury plans to sell NZ$200mn of the 0.25% 15 May 2028 bond, NZ$150mn of the 4.25% 15 May 2034 bond and NZ$50mn of the 2.75% 15 May 2051 bond today.