Daily outlook for NZ rates

Westpac Research notes:

NZ swap yields 1 day: Given little net US bond yield movement overnight, the NZ 2yr swap rates should open unchanged at 2.94%, while the 10yr should open at 3.88%.

NZ swap yields 1-3 month: Short maturity NZ interest rates should fall further during the next few months. The RBNZ has started a fresh easing phase, which should be worth 75bp in total, and possibly 100bp. We target a low in the 2yr of 2.65% (an OCR of 2.50% by year end plus 15bp risk premium). The 10yr yield will continue to be hostage to expectations of Fed policy, but assuming normalisation starts in September, we target at least 4.30%.