Just like the RBNZ Governor, the short end continues to “watch, worry and wait” as direction from here (with around 11bps of cuts priced in by mid-2019) hinges heavily on the upcoming flow of data, suggests the research team at ANZ.
Key Quotes
“The picture is a little clouded by upcoming (backward-looking) Q2 GDP figures, and that may see the market drift a little higher as longs get a little impatient.”
“Carry investors will also need to be mindful of funding markets. BKBM has shown a tendency to drift higher post the bill futures close out and our Australian colleagues do believe strains over the Tasman will intensify into quarter-end, which has spilled over here previously (rightly or wrongly). However, we doubt yields will push up too far, especially ahead of the RBNZ’s September OCR Review.”
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