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Short End Firms Into Close

BONDS

The short end of the NZGB curve firmed into the close on spillover from the RBA's dovish 25bp hike. NZGBs finishing dealing 1bp richer to 4bps cheaper across the major benchmarks, the curve twist steepened pivoting on 5s.

  • The 10-Year US NZ Swap Spread remains well within recent ranges, on Tuesday we sit at +55bps.
  • RBNZ dated OIS remain stable; a terminal rate of ~5.55% is seen in Feb 24, there are ~35bps of cuts by Oct 24.
  • Ranges were narrow for the most part today, little meaningful domestic news flow crossed and the local docket was empty.
  • Due tomorrow we have Q4 2-Year Inflation Expectations. There is no estimate and the prior read was 2.83%.

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