BONDS: NZGBS: Bull-Steepener, Apr-29 Supply Sees ~6.0x Cover
NZGBs closed showing a bull-steepener, with benchmark yields 1-3bps lower. While the 2-year finished at session bests, the 10-year yield closed some 4bps higher than its low.
- The April 2029 note auction recorded a bid-to-cover ratio of 5.30x — the second highest since the bond's introduction in 2018, trailing only the 5.995x peak in November 2023. Meanwhile, the May 2035 bond saw a ratio of 2.74x, a notable improvement from 2.11x at its last issuance in December.
- New residential lending falls ~NZ$70m m/m to NZ$8.0b. New residential on fixed terms drops to 70% from 75%.
- Cash US tsys are ~1bp cheaper in today's Asia-Pac session after yesterday's strong data-induced rally. The focus is now on today's weekly jobless claims, trade balance, and unit labour costs data.
- "Fed's Kashkari says the labor market is showing some signs of slowing; the Fed must wait and see as the economy faces uncertainty." – Bloomberg
- RBNZ appoints Kate Le Quesne to the new role of Assistant Governor, Enterprise Services.
- Swap rates closed 3-5bps lower, with the 5-year leading.
- RBNZ dated OIS pricing closed flat to 5bps softer across meetings. 6bps of easing is priced for July, with a cumulative 33bps by November 2025.
- Tomorrow, the local calendar will be empty.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
FOREX: G10 Wrap - USD Struggling To Catch A Bid
The BBDXY has had an Asian range of 1221.53 - 1225.17, Asia is currently trading around 1222. USD/Asia has stabilized with China back from holidays. Bloomberg - “The ECB is poised to continue cutting rates, according to Yannis Stournaras. The Greek central bank chief expects a clear slowdown of inflation in Europe due to US tariffs, and believes the continent will respond selectively to any US measures.” The lower China services PMI saw risk trade heavy in our session providing a bid to safe havens like the JPY.
- EUR/USD - Asian range 1.1280 - 1.1320, Asia is currently trading 1.1315. Intra-day support is around the 1.1250 area, should this area not hold demand should remerge on dips back to 1.1100.
- GBP/USD - Asian range 1.3260 - 1.3300, Asia is currently dealing around 1.3295. Intra-day support is around the 1.3250 area, then the pivotal 1.30/31 support is next.
- USD/JPY - Asian range 143.56 - 144.28, has drifted sideways for most of the Asia session. Look for some support initially back towards 143.00, we would probably need another catalyst to test below that again.
- USD/CNH - Asian range 7.2002 - 7.2352, the USD/CNY fix printed 7.2008. The capitulation in USD/Asia has taken a breather today, rallies should now find sellers who could not get out because of the pace of the move. First resistance 7.2600 Area and then back towards 7.3000.
- Cross asset : SPX -0.2%, Gold $3360, US TYM5 110-30, BBDXY 1221, Crude oil $58.02.
- Data/Events : SW PMI’s, FR Industrial Production & PMI’s, Spain Unemployment, Spain PMI’s, Italy PMI’s, Germ PMI’s, EU PPI, US Trade Balance
Fig 1: GBP/USD Spot Hourly Chart
Source: MNI - Market News/Bloomberg
FOREX: Antipodean Wrap - AUD & NZD Rise Falters As US Stocks Stall
The Asian session started off on the back foot with US stocks closing poorly even after a better than expected ISM Services PMI overnight. The lower China services PMI saw Asia remain under pressure providing headwinds for both the AUD and NZD. MNI - AU Building approvals in March were significantly weaker than expected falling 8.8% m/m with the more stable private houses component down 4.5% m/m. Bloomberg - “ANZ is forecasting a 0.2pp rise in the NZ Q1 unemployment rate to 5.3%, which would be the highest since Q4 2016, as growth in labour supply exceeds labour demand. It doesn’t think the data or the upcoming budget on May 22 will change the RBNZ monetary policy outlook and that the updated forecasts for the May 28 meeting will be more important, especially given the global environment.”
- AUD/USD - Asian range 0.6443 - 0.6470, the AUD is currently dealing around 0.6455. The AUD move higher seems to be running out of steam as risk runs into resistance. Support should be seen back towards 0.6400, a break below 0.6300 needed to reverse direction.
- AUD/JPY - Asian range 92.76 - 93.05, price goes into London trading around 92.85. Price is stalling towards the resistance seen around 94.00 as risk struggles in Asia. Support seen initially back towards the 92.00 area.
- NZDUSD - Asian range 0.5944 - 0.5973, going into London trading around 0.5965. The NZD continues to hold up well and is consolidating within a 0.5875/0.6025 range. On the day dips back to 0.5900 should continue to find support.
- AUD/NZD - Asian range 1.0819 - 1.0849, the Asian session is currently trading 1.0825. Sellers have returned back towards the 1.0850 area.
Fig 1 : AUD/JPY Spot Hourly Chart
Source: MNI - Market News/Bloomberg
GOLD: Gold’s Rally Returns with Strong Gains Today
- Gold’s overnight rally continued into the Asia trading day delivering a +0.80% gain.
- With equities strong across the region, bonds quiet and the dollar stronger against regional crosses, it was a day possibly where gold could have fallen.
- With positioning much lighter in longs than previously and money managers more neutral than they have been in over a year, the rally today looked like the re-establishment of longs given the recent sell off.
- Gold markets will be actively watching the FED this week as expectations for rate cuts diminish following the stronger than expected labour market.
- Gold opened the day at US$3,334.12 and rallied to $3,359.70 by mid afternoon.
- Bolivia’s released details of its reserves today showing that the Central Bank are another of the ever growing list of Central Banks adding to their gold reserves having purchased 4.94 tons of locally-produced gold in the first quarter of 2025
