BONDS: NZGBS: Modestly Richer After Benign US PCE, NZ Con Conf Up

NZGBs are 2-3bps cheaper after US tsys finished showing a bear-steepener, with benchmark yields 7-9bps higher, following a surge in JOLTS job openings and Quits levels.

• The Chicago Business Barometer, produced with MNI, cooled 6.0 points to 56.7 in June. The Barometer remained in expansionary territory for a second consecutive month.
• Cleveland Fed President Hammack, a 2026 FOMC voter and one of the most hawkish members of the Committee, told CNBC (on the sidelines of the ECB Sintra monetary policy symposium Tuesday) that inflation is "too high" and that rate hikes may thus be necessary to tame it.
• SCOTUS announcement highlights: Rejected Trump's order to end birthright   citizenship, barred transgender athletes from girls’ sports, knocked down campaign finance rules on donation limits, and will consider striking down assault gun bans. Of note, NPR accidentally released a story that Justice Alito would retire - retracted shortly after.
• Swap rates are 2-4bps higher, with a steeper 2s10s curve.
• RBNZ-dated OIS pricing is slightly firmer across meetings. 19bps of tightening is priced for July, while February 2027 assigns 71bps.
• Tomorrow, the local calendar will be empty.
• On Thursday, the NZ Treasury plans to sell NZ$250mn of the 4.50% May-30 bond, NZ$150mn of the 4.25% May-36 bond and NZ$50mn of the 5.00% May-54 bond.

• RES 3: 133.15 - High Feb 24 ‘26
• RES 2: 131.06 - 61.8% retracement of the Feb - May Bear Leg
• RES 1: 129.01 - 50-dma (cont)
• PRICE: 127.62 @ 16:56 BST Jun 30
• SUP 1: 127.40/41 - Low May 18 / Jun 22
• SUP 2: 126.19 - 2.0% 10-dma envelope
• SUP 3: 125.70 - Low Feb 1999

Bearish pressure has eased, but the broader theme remains negative in JGB futures. Through the latest sell-off, the price printed through the lower 1.0% 10-dma envelope on the continuation contract, signalling the strength of downside pressure. This widens the gap with the 50-dma, a break above which is needed to highlight a stronger short-term reversal and signal scope for any recovery. The 50-dma is currently at 129.01. A strong bull rally would open 131.80, a Fibonacci retracement.  

• Whilst gold finished lower during the US trading day, it did see buyers emerge and saw buyers emerge near $3,950 again and ended back above $4,000.  
• Gold ended down -0.20% at US$4,006 - having traded in a range of $3,943 to $4,063.
• The emergence of buyers coincided with gold reaching oversold on the 14-day relative strength index ashe precious metal remains below all major moving averages.
• The break back above $4k is the second time that buyers have emerged around $3,950. We now expect that gold will likely trade in a $3,800 - $4,100 leading into the NFP key to its next major move. It is unlikely that the NFP will alter the pathway for rates and as such we see further downward pressure likely to build for bullion.