AUSSIE BONDS: Cheaper Despite CPI Beat

• Gold sold off in early trading in Asia today, before staging a comeback.
• Opening at US$2,935.45, gold sold off to a low of $2,921.48 before rebounding back above opening levels to be at $2,941.95.
• Year to date Gold is up over 10% in 2025, delivering positive returns in every trading week of the year.
• The much-mooted revaluation of US Gold reserves touted by the US President’s team could actually be good for prices, according to BofA Head of Commodities Research (per BBG). 
• In a further bullish sign for gold yet another Central Bank has increased their gold purchases with data from Iran showing imports of 100 tonnes during their financial year, up from 30 tonnes prior (according IRNA). 

• China’s main bond futures headed in different directions at the start of the week.
• China’s 10YR bond future is down -.18 at 108.075, marking the third trading day in a row of declines.
• The move lower sees the 10YR future inching towards the 100-day EMA of 108.02, with the 50-day EMA being dragged lower at 108.61.
• The 2YR bond future is up +0.05 today at 102.62, below all major technical levels.
• Cash market is weaker today also with government bonds up to 1bp higher in yield across most maturities.
• Equity markets too are down today with key bourses down by -0.10% to -0.50%
• This week sees the decision on the 1-year Medium Term Lending Facilities with market expectations for now change at 2.00%, but with an increase in volume from CNY200bn to 300bn

NZGBs closed showing a bull-flattener, with benchmark yields 2-5bps lower. Nevertheless, NZGBs finished mid-range, with the 10-year underperforming its Australian counterpart. 

• The AU-NZ 10-year differential finished at -9bps compared to the recent high of +10bps in early November, which marked the highest level since August 2022. However, a simple regression analysis of the AU-NZ 10-year yield differential against the AU-NZ 1Y3M spread over the past 18 months shows that the 10-year differential is around 14bps above fair value based on the regression model.
• NZ Q4 2024 retail sales (ex inflation) were stronger than forecast, rising 0.9% q/q, against a 0.5% market expectation. This was the firmest q/q print since the end of 2021. This shows the impact of RBNZ easing beginning to benefit parts of consumer spending.
• Swap rates closed 3-6bps lower, with the 2s10s curve flatter.
• RBNZ dated OIS pricing closed little changed out to August but 3-5bps firmer beyond. 27 bps of easing is priced for April, with a cumulative 58 bps by November 2025.
• Tomorrow, the local calendar is empty.
• On Thursday, the NZ Treasury plans to sell NZ$225mn of the 3.00% Apr-29 bond, NZ$225mn of the 3.50% Apr-33 bond and NZ$50mn of the 1.75% May-41 bond.