By Kymberly Martin
NZ swaps closed down 1-2bps yesterday. The short-end of the NZ swap curve remains reluctant to price much chance of a rate hike in the year ahead (currently 15% priced).
However, it is also reticent to price rate cuts. This has kept 2-year swaps in a tight 2.75-2.95% range for the past two months. They sit mid this range (2.85%) at present.
NZ bonds markets were fairly quiet yesterday. Data showed the uptrend in foreign ownership of NZ bonds continued in April. 69.0% of NZGBs are now held by non-residents up from 68.3% previously.
Yesterday’s Australian Budget confirmed the Government’s slower than previously expected return to surplus will require increased AU bond issuance.
More details will be provided by the AU Office of Financial Management in the next few days.
However, credit rating agencies, S&P and Moody’s were quick to affirm AU’s sovereign rating at AAA stable (an increasingly rare commodity in today’s world).
Overnight, equity markets remained buoyant and US 10-year bond yields pushed on up to 1.95%.
Today the LGFA (Local Government Funding Agency) will auction $10m of LGFA17s, $15mof LGFA19s and $215m of a new LGFA21 bond. Assuming a successful auction this will take outstanding LGFA bonds on issue to $2.06b.
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2 Comments
Kymberly, do you know which nationality is buying them?
I would be interested to know if the figures show any increase from Japan as I have read the Japanese have become net buyers of foreign bonds very recently but haven't seen any data to confirm this assertion.
Love the industrial strength in-house jargon
NZ swaps closed down 1-2bps yesterday. The short-end of the NZ swap curve remains reluctant to price much chance of a rate hike in the year ahead (currently 15% priced). However, it is also reticent to price rate cuts. This has kept 2-year swaps in a tight range for the past two months. They sit mid this range (2.85%) at present
I gotta tell ya - I don't understand a bit of that .. can ya use simple words please
memos to David Chaston and Gareth Vaughan and Bernard Hickey
need a glossary of terms
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