US TSYS: Futures Re-Open Weaker

RBNZ-dated OIS pricing is little changed across meetings today, holding 1bp softer to 4bps firmer than last Wednesday’s pre-RBNZ policy decision levels. 

• Last Wednesday’s 50bp rate cut to 3.75% had been largely anticipated by the market with 49bps of the move priced.
• Currently, 27bps of easing is priced for April, with a total of 59bps expected by November 2025.

Figure 1: RBNZ Dated OIS Today vs. Pre-RBNZ (%)

Source: MNI – Market News / Bloomberg

New Zealand Q4 2024 retail sales (ex inflation) were stronger than forecast, rising 0.9%q/q, against a 0.5% market expectation. The Q3 dip of 0.1%q/q, was also revised higher to flat. 

• This was the firmest q/q print since the end of 2021.  Stats NZ noted: "Ten of the 15 retail industries had higher retail sales volumes in the December 2024 quarter, compared with the September 2024 quarter, after adjusting for price and seasonal effects."
• "The biggest contributors to the rise in retail activity in the December 2024 quarter were: electrical and electronic goods retailing – up 5.1 percent, department stores – up 4.2 percent, accommodation – up 7.6 percent, food and beverage services – up 2.3 percent."
• This hints at some return of discretionary spending, with most of these categories negative in parts of 2024. This shows the impact of RBNZ easing beginning to benefit parts of consumer spending.
• The chart below shows the level of retail sales volumes. We are still comfortably sub 2021 cycle highs. In y/y terms, Dec retail sales volumes were close to flat. 

Fig 1: NZ Retail Sales Volumes - Level 

Source: MNI - Market News/Bloomberg 

• Thailand to Sell THB3bn of 182-Days Bills
• Taiwan to Sell NT$30 Billion 5-Year Bonds
• China to Sell CNY102bn 2030 Bonds
• Philippines To Sell PHP 7.0Bln 91D Bills (PH0000058588)
• Philippines To Sell PHP 7.0Bln 182D Bills (PH0000059164)
• Philippines To Sell PHP 8.0Bln 364D Bills (PH0000059933)
• South Korea to Sell KRW1.4tn 5-Year Bonds
• Bank of Korea to Sell KRW500bn 91-Day Bonds
• South Korea to Sell KRW1.4tn 5-Year Bonds