RBNZ: MNI RBNZ Review - April 2024: On Hold, Awaiting Further Data
Apr-12 02:14
- The RBNZ's April monetary policy decision delivered few surprises. The central bank noted: "Overall, members agreed that the balance of risks was little changed since the February Statement."
- The April policy meeting doesn’t deliver forecast updates, or a press conference. Hence it arguably saw little need to shift the tone of its statement ahead of the next policy meeting on the 22nd of May, particularly as the balanced of risks were seen as little changed relative to the February policy meeting.
- All in all, the RBNZ clearly sees it as being too early for a dovish shift in terms of the outlook. Whilst the bar to hike further is clearly elevated, the statement didn't give any hints that the restrictive policy stance will be changed in the near term. Ahead of the next policy meeting we have some key data points. Q1 CPI prints on Apr 17, so next Wednesday. Wages and employment figures are out on May 1, then inflation expectations on May 13.
- Full review here:
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JGBS: Futures Little Changed At Lunch, Toyota Motor To Meet Labor Union’s Demands
Mar-13 02:05
At the Tokyo lunch break, JGB futures are unchanged compared to the settlement levels.
- (Bloomberg) Toyota Motor will meet its labor union’s demands for increases in salary and bonuses in full for the fourth straight year, Mainichi reports. (See link)
- Today, the local calendar is empty.
- Cash US tsys are dealing ~1bp richer in today’s Asia-Pac session after yesterday’s 5-6bps cheapening following February’s US CPI print. Looking ahead, the main focus is on Thursday's Retail Sales and PPI data.
- Cash JGBs are slightly mixed, with yield movements bounded by +/- 1bp. The benchmark 10-year yield is 0.2bp lower at 0.768% versus the yearly high of 0.779% set yesterday.
- Swaps are slightly richer. Swap spreads are mixed.
AUSSIE BONDS: Narrow Ranges, Light Local Calendar, Eyes On RBA Next Tuesday
Mar-13 01:36
In roll-impacted dealings, ACGBs (YM -5.0 & XM -5.8) are holding in weaker after trading in relatively narrow ranges in today’s Sydney session.
- Earlier, CBA Household Spending fell 0.3% m/m (+3.5% y/y) versus +3.1% (+3.6%) prior. This represented the final data update before the forthcoming RBA Policy Decision scheduled for next Tuesday.
- Cash ACGBs are 5-6bps cheaper, with the AU-US 10-year yield differential 1bp higher at -14bps.
- Swap rates are 5-6bps higher.
- The bills strip has bear-steepened, with pricing -1 to -5.
- RBA-dated OIS pricing is flat to 4bps firmer across meetings, with later-24 leading. A cumulative 45bps of easing is priced by year-end.
- (AFR) Seoul | Chinese steel mills are cutting production due to a global glut and a worsening property crisis, squeezing iron ore prices already weakened by stockpiling of the metal over the past months. (See link)
STIR: $-Bloc Still Poised To Ease In 2024 Ahead Of Next Week’s FOMC Meeting
Mar-13 01:25
STIR markets within the $-bloc persist in foreseeing a notable easing cycle in 2024. In fact, over the past week, the pricing for the year-end official rate in NZ has eased by approximately 10-15bps. Conversely, year-end OIS pricing in the US, Canada and Australia are little changed. As for overnight developments, post the hotter-than-expected February US CPI:
- Fed Funds implied rates pulled back off session highs but held the bulk of post-CPI gains, in a step away from fully pricing a first cut in June.
- Ahead of next week’s FOMC meeting (March 19-20), US cumulative cuts: 0.5bp Mar, 4bps May, 19.5bps June and 34bps July.
- December 2024 expectations and the cumulative easing across the $-bloc stand at: 4.47%, -86bps (FOMC); 4.24%, -76bps (BOC); 3.87%, -45bps (RBA); and 4.85%, -65bps (RBNZ).
Figure 1: $-Bloc STIR (%)
Source: MNI – Market News / Bloomberg
