BONDS: NZGBS: Closed Slightly Cheaper After A Subdued Session

NZGBs closed little changed after being 3bps cheaper early on fears that US-Iran negotiations would be derailed by the ongoing Israel-Hezbollah conflict.
• Risk appetite has improved following a joint statement from mediators Qatar and Pakistan and comments on X from Iran's foreign minister Araghchi that progress had been made in US-Iran talks and that the technical team would continue to work out details through the week.
• Brent started today reaching $82.30/bbl but then declined to a low of $78.69. It is currently down 1.6% to $79.31, holding above initial support at $75.94. August WTI is 0.4% lower at $75.51, off the intraday low at $75.01. It reached $78.14 at the start of trading.
• The NZ-AU 10-year was unchanged on the day.
• Swap rates closed flat to 2bps higher, with a steeper 2s10s curve.
• RBNZ-dated OIS pricing closed little changed across meetings. 21bps of tightening is priced for July, while February 2027 assigns 74bps.
• The local calendar will be empty until Filled Jobs data on Monday 29 June.
• On Thursday, the NZ Treasury plans to sell NZ$225mn of the 2.00% May-32 bond, NZ$175mn of the 4.25% May-34 bond and NZ$50mn of the 2.75% May-51 bond.

Bloomberg Finance LP

After starting Monday’s APAC trading higher, crude fell following a joint statement from mediators Qatar and Pakistan and comments on X from Iran’s foreign minister Araghchi that progress had been made in US-Iran talks and that the technical team would continue to work out details through the week. A map has been agreed to reach a deal over the 60-day period. A communication framework regarding the Strait of Hormuz was also agreed. Bloomberg is reporting that there are growing signs of movement in the region but with uncertainty elevated, risks are high.

• Reports have come through that hostilities in Lebanon have ceased for 48 hours. There were fears that negotiations would be derailed by the ongoing Israel-Hezbollah conflict but Araghchi said that talks had “DELIVERED MAJOR PROGRESS TO END LEBANON WAR" – BBG
• Araghchi reported that “OIL AND PETROCHEM EXPORTS ARE WAIVED, BLOCKADE LIFTED, SOME FROZEN ASSETS RELEASED, AND MAJOR RECONSTRUCTION & DEVELOPMENT PLAN LAUNCHED FOR IRAN" (Reuters).
• Kuwait Petroleum put out its first naphtha tender for a long time but buyers would have to provide their own vessels. It also said that all “force majeure” notices implemented because of the Iran War would be lifted.
• Brent started today reaching $82.30/bbl but then declined to a low of $78.69. It is currently down 1.6% to $79.31, holding above initial support at $75.94. August WTI is 0.4% lower at $75.51, off the intraday low at $75.01. It reached $78.14 at the start of trading.
• Later the Fed’s Waller, ECB’s Lagarde and Lane appear. In terms of data, only May Canadian CPI is of note.

• Gold edged higher Monday as it approached oversold on the 14-day RSI and oil prices declining.  
• Gold is up +0.50% to US$4,177 having fallen almost 2% last week.  
• Potentially capping significant falls Monday was gold near oversold on the 14-day relative strength index, showing clearly that there are more sellers than buyers at present.
• The key immediate support below current levels is $4,100 followed by the June 10 low of $4,072
• Gold's price action this week will be largely dictated by key macro data and how it impacts interest rate expectations. US Q1 GDP (Final Estimate): Strong growth will back the Fed's hawkish path, pressuring gold further. Manufacturing & Services PMI: Signals on economic health will steer dollar momentum. University of Michigan Inflation Expectations: Sticky sentiment will reinforce higher-for-longer rate fears
• Expect gold to trade in a $4,000 - $4,200 range in the early part of the week ahead of US GDP later in the week.