BONDS: Richer, Trade Surplus Widens, Budget Tomorrow
May-20 23:12
In local morning trade, NZGBs are 3-4bps richer despite a mixed finish for US tsys on Tuesday. It was, however, a relatively quiet session with limited data (Philly Fed non-mfg activity and Redbook retail sales index) but multiple Fed speakers.
- Depending on how tariffs and their impacts play out, StL Fed Musalem suggested he could either support an easing bias, a "balanced" approach, or indefinitely holding rates. In the meantime, policy "is currently well-positioned."
- Stocks were weaker, but off late lows, short covering as markets await vote on tax bill.
- Late comment from Atlanta Fed Bostic: that passage of Pres Trump's "big, beautiful tax bill" could add to overall uncertainty.
- NZ’s trade surplus widened to NZ$1.426b in April from a revised +NZ$794m in March. 12 months ytd trade deficit narrowed to NZ$4.812b from a revised NZ$6.250b in March.
- Swap rates are 8-9bps lower.
- RBNZ dated OIS pricing is little changed across meetings. 25bps of easing is priced for May, with a cumulative 64bps by November 2025.
- Tomorrow, the local calendar will see the Budget.
- On Friday, the NZ Treasury plans to sell NZ$250mn of the 3.00% Apr-29 bond, NZ$150mn of the 3.50% Apr-33 bond and NZ$50mn of the 1.75% May-41 bond.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
GLOBAL: Monday's Holidays
Apr-20 22:56
Most of Asia is open today with only Australia, New Zealand and Hong Kong closed for Easter Monday. All of Europe including the UK is closed. The US and Canada are open as well as most of South America except for Brazil.
GOLD: Gold Jumps to New Highs as Open
Apr-20 22:49
- Playing catch up after a closed period Friday, gold jumped in early trading in the Asia morning to reach new all-time highs.
- Having closed Thursday afternoon at US$3326.85, gold has touched a new high of $3,346.28.
- This takes gold year to date gains in excess of 28% and is causing forecasters globally to reset their year end expectations.
- Gold sits above all major moving averages, with the nearest the 20-day EMA of $3,156.15.
- With some markets closed, it is likely to be a disjointed day. At present the equity futures in Japan are negative whilst in Taiwan equity futures are positive.
ASIA: Government Bond Issuance Today
Apr-20 22:28
- Bank of Korea to Sell 500 Billion Won 91-Day Bonds
- South Korea to Sell 2.8 Trillion Won 5-Year Bonds
- Thailand to Sell 30 Billion Thb of 182-Days Bills
- Philippines To Sell PHP 8.0Bln 91D Bills (PH0000058927)
- Philippines To Sell PHP 8.0Bln 182D Bills (PH0000059396)
- Philippines To Sell PHP 9.0Bln 364D Bills (PH0000060261)
