BONDS: Closed Slightly Richer But Underperforms $-Bloc
Nov-12 04:00
NZGBs closed 1bp richer across benchmarks.
- On a relative basis, NZGBs have underperformed the $-bloc, with the NZ-US and NZ-AU 10-year yield differentials both 3bps wider at +2bps and -27bps, respectively.
- Nevertheless, the NZ-AU 10-year yield differential remains close to its lowest level since 2020. At this level, investors could be lured into taking differential reversal trades. That said, such trades carry meaningful risk ahead of tomorrow’s October employment data. (see chart)
- Swap rates closed flat to 2bps lower, with the 2s10s curve flatter.
- RBNZ dated OIS pricing closed little changed across meetings. 28bps of easing is priced for November, with a cumulative 38bps by February 2026.
- The local calendar will see Card Spending data tomorrow.
- Tomorrow, the NZ Treasury plans to sell NZ$250mn of the 4.50% May-30 bond, NZ$150mn of the 4.25% May-34 bond and NZ$50mn of the 5.00% May-54 bond.
- The NZ Treasury has today announced the appointment of the following joint lead managers to form the panel for the syndicated tap of the 15 May 2036 nominal bond: ANZ Bank; J.P. Morgan; UBS; and Westpac.
- As previously announced, the Treasury expects to launch this transaction before calendar year-end 2025, subject to market conditions. As per usual practice, if the syndication occurs, the scheduled bond tender for that week will be cancelled.
Bloomberg Finance LP
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CHINA: September Exports Surge (Ex US) as Trade War Intensifies
Oct-13 03:18
- The moderation of exports in August was short-lived as September's numbers jumped +8.3% YoY, beating expectations and much stronger than the month prior.
- According to BBG estimates, the decline in exports to the US was significant, down -27% YoY. This points to the growth of demand from non US markets, arguably weakening the US's position in a trade war. Exports to Africa, India and other Asian nations are soaring with the latter back to pre-COVID levels.
- US President Donald Trump had threatened to raise tariffs on China and withdraw from a high-profile upcoming meeting with Chinese President Xi Jinping, in a lengthy statement on Truth Social, citing a letter from Beijing which he claims lays out new rare earth export control measures.
- The new Chinese rare earth export control measures are scheduled to take effect on December 1. Starting November 8, Beijing will also restrict exports of equipment needed to manufacture batteries for electric cars in a bid to protect the competitiveness of Chinese autos, per The New York Times.
- Imports climbed +7.4% in September for it's largest monthly expansion since April 2024. Despite being a crude indicator for domestic demand, the result nevertheless comes a an invaluable time as the US rhetoric ramps up.
- Along with the decline in exports to the US, imports from the US declined -16.1%, widening the trade surplus with the US to $22.bn.
- Whilst this data captures a period before the weekend's escalation it may slightly strengthen Beijing's position in negotiations, given the ever growing decline in the US's importance to China's trade outcome.
MNI: CHINA YTD EXPORTS +7.1% Y/Y IN YUAN TERM: CUSTOMS
Oct-13 03:07
- CHINA YTD EXPORTS +7.1% Y/Y IN YUAN TERM: CUSTOMS
- CHINA YTD IMPORTS -0.2% Y/Y IN YUAN TERM: CUSTOMS
- CHINA YTD TRADE SURPLUS +CNY6.28 TRLN: CUSTOMS
MNI: CHINA SEP EXPORTS +8.3% Y/Y VS MEDIAN +6.5% Y/Y: CUSTOMS
Oct-13 03:06
- CHINA SEP EXPORTS +8.3% Y/Y VS MEDIAN +6.5% Y/Y: CUSTOMS
- CHINA SEP IMPORTS +7.4% Y/Y VS MEDIAN +1.8% Y/Y: CUSTOMS
- CHINA SEP TRADE SURPLUS +$90.45 BLN VS MEDIAN +$98.2 BLN
