IDR: IDR Steadies as BI Enters Markets

NZ government bond yields sit up from earlier lows. We opened with a softer tone, after US yields fell in Tuesday trade. However, 2yr to 10yr tenors are now only down marginally for the session. The 2yr is back to 2.98%, the 10yr near 4.36%. The 15 and 30yr bonds are off around 1bps. Spill over from the Australian monthly CPI beat, which aided firmer Aussie bond yields, has likely been in play. NZ 2yr swap rates have edged up slightly, last around 2.76%. 

• Local news flow has been light. Via BBG: "New Zealand will introduce a Business Investor Visa that will provide a pathway to residence for business migrants who are ready to invest in, operate and grow established businesses, Immigration Minister Erica Stanford says in emailed statement." The scheme will be open to applications from this November.
• While the NZ FinMin commented on easing the pathway for new supermarket operators to set up in the country, in order to boost competition in the space.
• Tomorrow on the data front, we have July filled jobs, along with the August ANZ business confidence/activity prints. 

The US Government has recently invested $400 million into MP Materials, the only US rare earth producer, this preceded the recent historic agreement with Intel where it is to make an $8.9billion investment in Intel common stock. It seems the Trump administration is not yet done and below are some comments attributed to Howard Lutnick and the news they could look to invest in Lockheed Martin next. Otavio Costa offers a critical viewpoint of the ever evolving encroachment of government into the private sector.

• (Bloomberg Economics) - “Trump Could Give Lockheed the Intel Treatment: The Trump administration is weighing an unprecedented move: taking an equity stake in defense companies — specifically Lockheed Martin — to boost munitions production. Such direct government intervention in a publicly traded defense company would be unprecedented.”
• NewsWire on X: “Trump Pentagon is 'thinking' about taking equity stakes in defense contractors, says Lutnick.”
• CNBC - “Trump Commerce Secretary Howard Lutnick says the administration is considering federal government partial ownership of defense corporations: " We use Palantir, PLTR, services, we would like a piece of Palantir."
• Eric Daugherty on X: “Howard Lutnick reveals he will now seek to have the United States federal government OWN a portion of the patents currently owned by universities as a result of new inventions."If we give them the money, don't you think it's fair the USA and taxpayers who funded it get a piece of that? We give tens, if not hundreds of billions to universities for them to do research. They invent things. You know who owns those patents? The universities. We are going to make a deal with them all."
• Otavio Costa on X: “This is what I think everyone is missing: At some point, a new political party will come into power — it's inevitable. The question is: How will government involvement in these companies evolve under new leadership? Administrations will change, but these equity stakes won't. This could lead us down a dangerous path, one we’ve seen before in less stable or less developed economies.”

China’s net supply of local government bonds is expected to decline in the fourth quarter, prompting some analysts to call for additional support measures, including further issuance of ultra-long-term special treasuries and the introduction of new policy-based financial instruments, the China Securities Journal reported. As of August 26, 76.6% of this year’s CNY1.3 trillion quota for ultra-long-term special treasuries had been issued, alongside CNY3.15 trillion of the CNY4.4 trillion in local government special bonds. The pace of issuance has already surpassed the scale recorded during the same period last year, the report said.