NZ bond yields surge on soaring borrowing requirement

New Zealand 10-year bonds went up after the Government unveiled a bigger-than-expected bond tender programme for 2024/25 and beyond. The forecast 2024/25 Government bond programme has been increased to $40 billion, $2b higher than that published in the May budget. The forecast bond programmes for 2025/26, 2026/27, and 2027/28 have also been revised higher, by $4b, $6b and $8b respectively.

The 2028/29 year has been added to the forecast period, with a $22b bond programme. The Treasury has downgraded its economic and fiscal forecasts to the point where the forecast return to the operating (Obegal) surplus and residual cash surplus is not achieved over the forecast horizon..