NEW ZEALAND: Q1 Retail Volumes Up More Than Forecast, Y/Y Pace Edges Higher

In post-Tokyo trade, JGB futures closed weaker, -11 compared to settlement levels, after US tsys finished modestly mixed on Tuesday.

• US curves unwound a large portion of Monday's steepening, with bonds outperforming weaker short-end rates as markets reassessed tariff-tied risks to global trade and the Trump Administration's efforts to meddle with the Federal Reserve's independent policymaking.
• Unwinding of haven demand and a poor 2-year auction saw the yield close 6bps higher at 3.82%. The long end was in the green all session, and the 10-year yield was 1bp lower at 4.40%.
• Europe’s return from its extended Easter holiday improved market depth.
• Risk-on sentiment extended into today’s Asia-Pacific session after US President Trump stated that he had no intention of firing Fed Chair Powell (which has been a cause of concern recently and around the outlook for Fed Independence). Such fears had weighed on broader US asset-related sentiment.
• Trump also stated that the final tariff number for China wouldn't be near the current 145%. He also expressed optimism around trade deals with lots of countries and spoke of the large investment agreements reached for flows into the US.
• Today, the local calendar will see Jibun Bank PMIs and the Tertiary Industry Index. PPI Services is due on Thursday.

In local morning trade, NZGBs are flat to 2bps cheaper, with a steeper curve, after US tsys finished mixed on Tuesday. 

• US curves unwound a large portion of Monday's steepening, with bonds outperforming weaker short-end rates as markets reassessed tariff-tied risks to global trade and the Trump Administration's efforts to meddle with the Federal Reserve's independent policymaking.
• Brief midday risk-on move extended after headlines that Tsy Sec Bessent (speaking at a JP Morgan event in DC - closed to public and media) saw the China tariff standoff as unsustainable and expected a de-escalation to occur. The bloom quickly came off the rose as sources clarified the gist of negotiations would be a "slog".
• Risk-on sentiment has extended into today’s Asia-Pac session after US President Trump stated that he had no intention of firing Fed Chair Powell.
• Trump also stated that the final tariff number for China wouldn't be near the current 145%.
• Swap rates are flat to 3bps higher, with the 2s10s curve flatter.
• RBNZ dated OIS pricing is showing 27bps of easing priced for May, with a cumulative 79bps by November 2025.
• Today, the local calendar will be empty.
• On Thursday, the NZ Treasury plans to sell NZ$250mn of the 4.50% May-30 bond, NZ$250mn of the 4.25% May-36 bond.

• MNI: UK JAN-MAR MEDIAN PAY AWARDS +3% :Brightmine