BONDS: NZGBS: Sharp Bull-Flattening In Line With US Tsys
Apr-15 05:00
NZGBs closed at session highs in a bull-flattening move, with benchmark yields falling 5–15bps across the curve.
- The short end underperformed, partly due to a sharper rise in NZ food prices, which climbed 3.5% in the year to March 2025, up from 2.4% in February. Stats NZ attributed the increase primarily to higher prices in the grocery food and meat, poultry, and fish categories, which rose 5.1% and 5.3%, respectively.
- Meanwhile, the long end found support from US tsys. Cash US tsys has bull-flattened during today's Asia-Pacific session, with yields flat to 4bps lower. The US calendar is light today, with attention turning to retail sales and remarks from Fed Chair Powell on Wednesday.
- Swap rates closed flat to 9bps lower, with the 2s10s curve flatter.
- RBNZ dated OIS pricing closed 1-2bps firmer across meetings. 30bps of easing is priced for May, with a cumulative 78bps by November 2025.
- Tomorrow, the local calendar will see Non-Resident Bond Holdings data, ahead of Q1 CPI on Thursday.
- On Thursday, the NZ Treasury plans to sell NZ$275mn of the 3.00% Apr-29 bond and NZ$225mn of the 4.25% May-36 bond.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
FED: March Economic Projections: Higher Inflation, Weaker Growth, Same Rates
Mar-14 21:28
The MNI Markets Team’s expectations for the updated Economic Projections in the March SEP are below.
- The unemployment rate is likely to rise slightly for 2025 alongside a downgrade in GDP growth, while the 2025 core and headline PCE inflation projections are set to rise again. Changes to later years will likely be limited, however.
- More detail on the shift in Fed funds rate medians is in our meeting preview - we will add more color next week.
FED: Market Pricing Nearly 3 2025 Cuts As Conditions Tighten
Mar-14 21:25
Amid rising government policy uncertainty, sentiment among businesses and consumers has fallen sharply since the start of the year, while equities and the dollar have reversed their post-election rise. Overall, financial conditions have tightened, even if stress is not yet mounting, e.g. no major widening of credit spreads (the accompanying chart shows the Fed’s financial conditions impulse index but only through January).
- Combined with growth fears, this has affected expectations for the Fed’s rate path, with around 18bp more cuts expected in 2025 compared with what was seen after the January FOMC. 65bp of cuts are priced for the year as a whole. 2025 cut pricing reached 71bp before the February inflation data and 76bp before the February payrolls report.
- A rate cut is seen with near zero probability for March’s meeting, but the first full cut is just about priced for June, with a second nearly priced by September.
- Chair Powell has no reason to endorse or refute these expectations – he’s likely to be happy with a press conference that ends with little discernable change in pricing.
CANADA'S CARNEY ANNOUNCES ELIMINATION OF THE CONSUMER CARBON TAX
Mar-14 21:17
- CANADA'S CARNEY ANNOUNCES ELIMINATION OF THE CONSUMER CARBON TAX
