JGBS: Twist-Steepener Holds After Today's Mixed 30Y Auction

NZGB benchmark yields closed 6-7bps higher, but slightly below session highs (see chart). 

• On a relative basis versus the $-bloc, NZGBs also had a heavy session, with the NZ-US and NZ-AU 10-year yield differentials 2-3bps higher. However, it is worth noting that the RBA decision was delivered with the local market closed. Accordingly, any market reaction will be reflected in tomorrow’s open. That said, at this stage, the reaction has been muted, with the RBA noting that inflation risks have shifted higher and that it wanted more time to judge how persistent these pressures are.
• (Bloomberg) “Westpac New Zealand is raising interest rates on fixed-term home loans of two years or longer. Effective Wednesday, a two-year special home loan will carry a 4.75% rate up from 4.45%.”
• Swap rates closed 4-6bps higher, with the 2s10s curve flatter.
• RBNZ-dated OIS pricing closed flat to 11bps firmer across meetings. No change is priced for February, while November 2026 assigns 56bps of tightening.
• Tomorrow, the local calendar will see RBNZ Governor Breman host a media Q+A alongside Net Migration data.
• On Thursday, the NZ Treasury plans to sell NZ$175mn of the 4.50% May-30 bond, NZ$200mn of the 3.50% Apr-33 bond and NZ$75mn of the 5.00% May-54 bond.

Bloomberg Finance LP

A generally weak day for Asia's equity markets today with the biggest falls from Hong Kong and India. As the world awaits the FOMC decision on rates, attention turns to the forward guidance as the markets are now set for a December cut.  The pathway for rates in 2026 has become less certain now with investors set to pour over every part of the FOMC output.  This uncertainty has given rise to profit taking / de-risking ahead of the FOMC.  Even the tech sector took a breather today with key names like SK Hynix in Korea and TSMC in Taiwan falling.  In Japan, expectations of a potential interest-rate hike have pushed up bond yields and strengthened the yen , which tends to weigh on export competitiveness and investor sentiment in nearby markets. 

• The NIKKEI has managed to stay positive today, gaining by +0.07% whilst the KOSPI fell by -0.36% with key tech stocks lagging.  
• China's bourses were heavy with the Hang Seng leading the falls, down -0.85% as other indexes falls were muted in a generally risk off day with some local commentators suggesting that profit taking was evident.
• India's NIFTY 50 finished Monday on the back foot and has started Tuesday with galls of -0.75% to be at 25,758.  The falls in recent days has seen the NIFTY trade through the 20-day EMA of 25,968 and is now near the 50-day EMA of 25,724.  It last traded below the 50-day EMA in early October.  
• The FTSE Malay KLCI is down -0.20% and the Jakarta Composite -0.40% on a generally weak day whilst the SE Thai bucked the trend and rose 0.45%

The AUD/USD is pushing back above 0.6630 and looking to test recent highs toward 0.6650 as Bullock confirms they did not consider a rate cut and discussed circumstances where they could hike. A sustained move above 0.6650 could see momentum pick up to challenge the more important 0.6700 area. {AUDUSD Curncy}