NEW ZEALAND: Retail Sales Volumes Beat Forecasts, Up For Sixth Straight Qtr

In post-Tokyo trade, JGB futures closed weaker, -23 compared to settlement levels, after US tsys finished showing a bear-flattener, with yields 2-6bps higher. The initial sell impetus for US tsys came from strong US data (ADP weekly employment and Retail Sales) and renewed uncertainty over US/Iran peace talks in Islamabad ahead of Wednesday evening's ceasefire deadline added to the reversal in early sentiment.

• However, US equity futures have re-opened higher in the first part of Asia Pac Wednesday trade. This comes after late Tuesday US trade where US President Trump announced an extension of the US/Iran ceasefire. To recap, he cited the request came from the Pakistan PM and that the ceasefire would be in place until the Iran government presented a unified proposal.
• Bloomberg - "BOJ Is Said Leaning to April Hold While Keeping Hawkish Stance. Officials still favor raising rates but see little need to rush with the economic outlook potentially shifting due to the situation in the Middle East."
• "The oil options market and curve are again pricing tighter coming physical supply as time runs out for diplomacy, with Hormuz still effectively shut and shortages of crude and product growing. Asia is where the squeeze is most visible." – BBG
• Today, the local calendar will see Trade balance data.

ACGBs (YM -5.5 & XM -5.0) are weaker after US tsys finished showing a bear-flattener, with yields 2-6bps higher. The initial sell impetus for US tsys came from strong US data (ADP weekly employment and Retail Sales) and renewed uncertainty over US/Iran peace talks.

• However, US equity futures have re-opened higher in the first part of Asia Pac Wednesday trade. This comes after late Tuesday US trade where US President Trump announced an extension of the US/Iran ceasefire. Trump also stated the naval blockade would continue.
• Cash ACGBs are 5bps cheaper with the AU-US 10-year yield differential at +66bps.
• The bills strip has bear-steepened, with pricing -1 to -5 across contracts.
• RBA-dated OIS pricing shows tightening across all meetings, with the probability of a 25bp hike rising from 78% for May to 163% by August and 212% by December 2026.  
• There are few local data releases this week with Westpac's leading index today and S&P Global PMIs on Thursday. Q1 CPI data is due to print on 29 April.
• The AOFM plans to sell A$1000mn of the 3.75% 21 April 2037 bond today and A$1000mn of the 2.50% 21 May 2030bond on Friday.

Bloomberg Finance LP

NZGBs are 3-4bps cheaper after US tsys finished showing a bear-flattener, with yields 2-6bps higher. The initial sell impetus for US tsys came from strong US data (ADP weekly employment and Retail Sales) and renewed uncertainty over US/Iran peace talks in Islamabad ahead of Wednesday evening's ceasefire deadline added to the reversal in early sentiment.

• Conflicting WSJ headlines did little to assuage uncertainty: "TRUMP MULLS CANCELING VANCE'S TRIP TO PAKISTAN ... VANCE COULD STILL LEAVE FOR PAKISTAN AS SOON AS TONIGHT".
• However, US equity futures have re-opened higher in the first part of Asia Pac Wednesday trade. This comes after late Tuesday US trade where US President Trump announced an extension of the US/Iran ceasefire. To recap, he cited the request came from the Pakistan PM and that the ceasefire would be in place until the Iran government presented a unified proposal (Trump described the current government as fractured). Trump also stated the naval blockade would continue.
• Swap rates are 3-4bps higher.
• RBNZ-dated OIS pricing is slightly firmer across meetings. 12bps of tightening is priced for May, while February 2027 assigns 100bps.
• 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-34 bond and NZ$50mn of the 5.00% May-54 bond.

Bloomberg Finance LP / MNI