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NZ swap curve steepens; Fitch raises LGFA ratings outlook, markets await Fed minutes

Bonds
NZ swap curve steepens; Fitch raises LGFA ratings outlook, markets await Fed minutes

By Kymberly Martin

NZ 2-year swap closed down 2 bps while 10-year closed unchanged.

Overnight, German and US yields pushed higher ahead of the release of Fed Minutes.

The NZ swap curve steepened yesterday, but via a fall in short-end yields while longer dates remained static. The 2-10s curve closed a little steeper at 53 bps. Yields on NZGBs closed down 1 bp across the curve. The yield on NZGB23s sits at 4.04%.

Fitch, the rating agency, yesterday confirmed the rating for the LGFA (Local Government Funding Agency) at AA+ (foreign currency rating AA), but revised its outlook to Positive from Stable. This reflects the Positive Outlook the agency has for the NZ sovereign rating as LGFA is now credit linked.

Overnight, markets appeared somewhat in limbo ahead of the release of the Fed Minutes at 8am this morning (NZT). Ahead of the meeting the direction for yields was higher. US 2-year yields have pushed up from 0.50% to 0.53% while 10-year has traded up to 2.35%.

Following this morning’s Fed Minutes, today’s domestic releases will be ANZ job ads and NZ PPI.

 
 
 
 
 
 
 
 

Daily swap rates

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Opening daily rate
Source: NZFMA
Opening daily rate
Source: NZFMA
Opening daily rate
Source: NZFMA
Opening daily rate
Source: NZFMA
Opening daily rate
Source: NZFMA
Opening daily rate
Source: NZFMA
Opening daily rate
Source: NZFMA

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