US Treasury rates are down 2-3 bps across the curve, with the 10-year rate at 2.29%.
The FOMC is expected to make only minor tweaks to its policy statement, which is released 6am tomorrow. Market pricing is about two-thirds priced for another rate hike in June and the Statement should keep open that prospect.
Fed speakers who have been out in force over recent weeks suggested an unchanged policy outlook despite some softer data, including the shockingly weak March CPI release.
In the local trading session yesterday, there is not much to report, with swap rates up about 1 bp across the curve.
The focus today will be on NZ’s labour market releases. Market expectations are for little change from previous readings, so that’s consistent with an unemployment rate in the low 5s and steady-low wage inflation.
Anecdotes point to higher wage pressures developing, but we’ll have to wait until later in the year to see that in the data.
Euro-area Q1 GDP, US ADP employment and the non-manufacturing ISM are the key global releases tonight.
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Jason Wong is on the BNZ Research team. All its research is available here.
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