Tsys have ticked away from session highs, this came alongside the USD extending losses as an offer in USD/JPY spilled over into broad based greenback weakness. Ranges do remain narrow in tsys, as the earlier move higher had little follow through. Cash tsys sit flat to 1 bps richer across the major benchmarks, the curve is marginally flatter. TYU3 deals at 111-11+, +0-03, a narrow 0-04+ range has been observed thus far.
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NZD/USD correlations with global equities and 10 year yield differentials have strengthened over the past week, standing out as a key macro driver in recent dealings. The table below presents levels of correlations between NZD and key macro drivers (note the yield differential reflects swap rates).
Fig 1: NZD/USD Correlation with Global Macro Drivers:
Source: MNI/Bloomberg
Tsys have held in narrow ranges in recent dealing with little follow through on moves. No meaningful macro news flow has crossed in recent dealing. This leaves cash tsys little changed across the major benchmarks.
The USD/CNY fix printed at 7.1212, versus a Bloomberg consensus of 7.1219.