In local morning trade, NZGBs are 2-3bps richer after US tsys finished the NY session stronger. US yields moved away from the recent 2024 highs assisted by technical buying, bargain hunting, and risk aversion. The $13bn of 20-year supply was especially well-received, with the result printing nearly 3bps below prevailing rates.

• There was limited economic data, but US mortgage applications rose despite higher rates - seasonally adjusted 3.3% last week after a flag week prior.
• Fed Beige Book: overall economic activity expanded slightly on balance since late February. Ten out of twelve Districts experienced either slight or modest economic growth from eight in the previous report, while the other two reported no changes in activity.
• Elsewhere, UK Headline and Core CPI inflation fell to 3.2% y/y and 4.2% y/y respectively, although both figures were a tick higher than expected.
• Swap rates are 3-4bps lower.
• RBNZ dated OIS pricing is 3bps softer for meetings beyond August. A cumulative 32bps of easing is priced by year-end.
• Today, the local calendar is empty apart from the NZ Treasury’s planned sale of NZ$275mn of the 4.5% May-30 bond, NZ$175mn of the 2.0% May-32 bond, NZ$50mn of the 2.75% May-51 bond and NZ$30mn of the 3% Sep-30 Inflation-Linked bond.