BONDS: ACGBs Trade Richer, Curve Flattens
Feb-27 04:18
ACGBs (YM +1 & XM +2) are stronger and trade in the middle of the session's ranges.
- Today, the local calendar has been light, we had Private capital expenditure, that came in at -0.2% for 4Q, with 3Q numbers being revised up to 1.6% from 1.1%, however this did little to move markets.
- Australia sold A$150m of inflation-linked bonds due Aug 2035. Investors offered to buy 3.41 times the amount of securities sold.
- RBA Deputy Governor Andrew Hauser signaled that under the new monetary policy committee regime, the central bank is unlikely to disclose individual board votes to avoid adding "noise" around rate decisions. Public speeches by members will likely reflect the board's consensus rather than personal views. Hauser also reaffirmed that the RBA remains cautious on rate cuts, diverging from market expectations of a steady easing cycle.
- Cash US tsys are 1-2bps cheaper in today’s Asia-Pac session after yesterday’s gains, curves are steeper, with the 2s10s +0.5bps at 18.726, just off recent lows of 16bps.
- Cash ACGBs are outperforming US Tsys & NZGBS today, trading flat to 2.5bps richer with the AU-US 10-year yield differential at +6.5bps.
- Swap rates are 1bps higher.
- The bills strip is little changed today
- Tomorrow, the local calendar will see January's Private Sector Credit MoM. The market expects it to decrease to 0.5% from 0.6%
- The AOFM plans to sell A$700mn of the 1.75% 21 November 2032 bond tomorrow
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BONDS: NZGBS: Richer But Well Off Bests, Fin Min In Parliament Tomorrow
Jan-28 03:46
NZGBs closed 3-6bps richer, with a flatter 2/10 curve, but well off session bests. The local market was 7-8bps richer early after yesterday’s strong lead-in for US tsys. Cash US tsys are ~2bps cheaper in today’s Asia-Pac session.
- NZGBs slightly outperformed their $-bloc counterparts, with the NZ-US and NZ-AU 10-year yield differentials narrowing by 1-2bps. The NZ-US 10-year yield differential, now at -7bps, is edging closer to the cyclical low of -15bps recorded in December 2022—the lowest since late 2020.
- Swap rates closed 2-3bps lower.
- RBNZ dated OIS pricing closed 1-4bps softer across meetings, with late 2025 leading. 48bps of easing is priced for February, with a cumulative 113bps by November 2025.
- Tomorrow, Finance Min Willis speaks to the Select Committee on the Budget Policy Statement and Half-Year Economic and Fiscal Update. RBNZ Chief Economist Paul Conway will also present a speech titled: Beyond the Cycle: Growth and interest rates in the long run.
- On Thursday, the NZ Treasury plans to sell NZ$200mn of the 1.50% May-31 bond, NZ$200mn of the 4.25% May-36 bond and NZ$100mn of the 1.75% May-41 bond.
EQUITIES: HK Equities Slightly Higher, Chinese Semiconductor Stocks Struggle
Jan-28 03:35
BOJ: Japan Government Nominates Junko Koeda To BoJ Board
Jan-28 03:30
Per BBG headlines, the Japan Government has nominated Junko Koeda to the BoJ board. She will replace Seiji Adachi.
- Per the new board member's website from Waseda Univsersity: "Ms. Junko Koeda previously held positions as a chief economist at the Ministry of Finance of Japan, an assistant professor at the University of Tokyo, and a staff economist at the International Monetary Fund. She has a Ph.D. degree in economics from UCLA and a bachelor’s degree from the University of Tokyo." (See this link for more details).
