NZGBs moved away from session cheaps after initially adjusting to Friday’s weakness in core global FI markets, with the previously alluded to firming in the JGB space the probable driver of the recovery from cheaps. That left the major benchmarks running ~4bp cheaper at the close, in what was a parallel shift across the curve.

• Swap rates retraced their early move higher, to print flat to 3bp lower at the bell, as that curve flattened, leaving swap spreads tighter, while pointing to some support for NZGBs being drawn from swap flows.
• RBNZ dated OIS pricing operates in familiar territory, with 63bp of tightening priced for next month’s gathering, alongside a terminal OCR of just under 5.45%.
• Local headline flow was non-existent today, leaving macro cues at the fore, although wider market liquidity was thinned out by the observance of a U.S public holiday.
• The local docket remains empty on Tuesday, which will leave macro matters at the fore over the early rounds of this week’s dealing.