BONDS: NZGBS: Closed Richer & Near Session Bests, CC Weakened
Mar-28 03:50
NZGBs closed richer and near-session bests despite a late spike higher. Benchmark yields finished -3bps versus session bests of 4-5bps lower.
- Outside of the previously outlined consumer confidence and jobs filled data, there hasn't been much by way of domestic drivers to flag.
- The NZ-US 10-year yield differential finished a choppy week -3bps at +21bps and sits just below the widest level for the year and back at November 2024 levels.
- Cash US tsys are flat to 2bps richer, with a flattening bias, in today's Asia-Pac session. The markets remain choppy amid all the noise around the myriad fiscal policy dynamics. Tariffs remain at the forefront after President Trump announced 25% tariffs on auto imports, starting next week, aftermarket Wednesday.
- Today’s US calendar will see Personal Income & Spending, PCE Price Index, Kansas City Fed Services Activity and U. of Mich. Sentiment data. We will also hear Fed Speak from Barr and Bostic.
- Swap rates closed 2-3bps lower.
- RBNZ dated OIS pricing is little changed for 2025 meetings. February 2026 is 4bps softer. 24bps of easing is priced for April, with a cumulative 65bps by November 2025.
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BONDS: NZGBS: Richer But Well Off Bests As US Tsys Cheapen On Budget Passage
Feb-26 03:44
NZGBs closed 1-2bps richer but well off the session’s best levels.
- With the local calendar light, today’s turnaround can be traced back to cash US tsys, which are currently 2-3bps cheaper in today’s Asia-Pac session. Earlier, the passage of the budget blueprint by the US House provided an upward backdrop for yields.
- "The House budget would pave the way for $4.5 trillion in tax cuts — about enough to pay for extending the expiring cuts but not enough to also cover Trump’s campaign promises for additional tax relief. The measure would add to the budget deficit despite calling for $2 trillion in overall spending cuts over ten years." (per BBG)
- Swap rates closed 2-4bps lower, with the 2s10s curve flatter.
- RBNZ dated OIS pricing is flat to 3bps softer. 26bps of easing is priced for April, with a cumulative 62bps by November 2025.
- Tomorrow, the local calendar will see ANZ Business Confidence.
- Tomorrow, the NZ Treasury plans to sell NZ$225mn of the 3.00% Apr-29 bond, NZ$225mn of the 3.50% Apr-33 bond and NZ$50mn of the 1.75% May-41 bond.
EQUITIES: Magnificent 7 Stocks Struggle, Focus On Nvidia Today
Feb-26 03:07
- Tesla is leading losses among the Magnificent Seven, pushing the gauge of the group into correction territory, with the Bloomberg Magnificent 7 Price Return Index down 10% from its December high. Tesla fell 8.39% on Tuesday and has been the biggest laggard, driven by a 45% drop in European sales last month, while rivals saw rising EV demand.
- Amazon & Apple closed little changed, while all other names closed down over 1%
- Nvidia is set to report Q4 earnings on after the US close on Wednesday, with investors watching AI spending trends amid concerns that data center operators may slow expenditures. Analysts are focused on Nvidia’s transition from Hopper to Blackwell chips, which could temporarily impact sales.
- Key estimates include Q4 revenue of $38.25b (data center: $34.06b, gaming: $3.02b), adjusted EPS of $0.84, and a 73.5% gross margin. Q1 revenue is projected at $42.26b, with 2026 revenue estimates at $198.63b. BBG Consensus ratings shows 68 buys, 7 holds, and 1 sell, with an average price target of $174.96 (38.6% upside). Nvidia shares are up 60.2% YoY, and the stock has an implied 8.5% one-day move post-earnings.
US TSY FLOWS: BLOCK - Likely Seller UXY
Feb-26 02:59
- -4,604 UXY at 113-19+, DV01 $406k. Contact trades -08 at 113-16+ last
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