BONDS: NZGBS: Post-RBNZ Sell-Off Extends After RBNZ Governor Remarks
May-28 23:06
In local morning trade, NZGBs are trading heavily, yields 5-8bps higher, extending yesterday‘s post-RBNZ sell-off.
- RBNZ Governor Christian Hawkesby, Assistant Governor Karen Silk and Chief Economist Paul Conway spoke to a parliamentary committee today. “The key message that we really want to get across from our document is the range of uncertainty that there is around that. I would focus less on the midpoint of our projection and more on those alternative scenarios that show there is a lot of different ways that this could play out from here.” (per BBG)
- Overnight, trading was muted amid a lack of fresh catalysts, with Wall Street confined to a narrow range awaiting Nvidia earnings after the bell. Nvidia's results were better than expected, despite headwinds regarding chips curbs to China. Eminis and Nasdaq futures are stronger.
- Swap rates are 3-7bps higher, with the 2s10s curve flatter.
- RBNZ dated OIS pricing is 1-7bps firmer across meetings. 8bps of easing is priced for July, with a cumulative 26bps by November 2025.
- Today, the local calendar will also see ANZ Business Confidence.
- The NZ Treasury also plans to sell NZ$225mn of the 4.50% May-30 bond and NZ$225mn of the 4.25% May-36 bond.
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MNI: UK APR BRC SHOP PRICES +0% M/M, -0.1% Y/Y
Apr-28 23:01
- MNI: UK APR BRC SHOP PRICES +0% M/M, -0.1% Y/Y
GOLD: Gold Jumps on Poor US Data
Apr-28 22:45
- Gold climbed into the US open to finish ahead having been lower for most part of the trading day.
- Gold finished higher by +0.73% at US$3,343.98, having been as low as $3,268.23 earlier in the day.
- As the USD continues to soften and bond yields rallied ahead of key US economic data on Wednesday, gold jumped as expectations for weaker data grew.
- Overnights’ data release, the Dallas Fed. Manufacturing Activity, fell to its lowest in 5 years with survey respondents showing executives describing the current situation as "chaos" as supply line disruptions decimate activity.
- This has reduced expectations for Wednesday’s data which sees employment , inflation and growth releases.
- Gold had started the week in the Asian trading session on the back foot, trending downwards before the Texas data which has refocused attention on the possibility that already the trade war may be showing up in US data.
JGB TECHS: (M5) Off Highs, But Underlying Strength Persists
Apr-28 22:45
- RES 3: 147.74 - High Jan 15 and bull trigger (cont)
- RES 2: 146.53 - High Aug 6
- RES 1: 142.95 - High Apr 7
- PRICE: 140.60 @ 16:37 GMT Apr 28
- SUP 1: 139.38 - 1.0% 10-dma envelope
- SUP 2: 136.57 - 1.382 proj of the Jan 28 - Feb 20 - Feb 26 bear leg
- SUP 3: 134.89 - 2.000 proj of the Jan 28 - Feb 20 - Feb 26 bear leg
JGBs are holding the bulk of the recent strong bullish reversal, rejecting any test of fresh cycle lows for the M5 contract. This defies the bearish momentum studies drawn on the longer-term chart, clearing moving-average resistance to print 142.40 at the new upper level. To the downside, sights are on 136.57, a Fibonacci projection. 144.48 is the medium-term target on any recovery.
