New Zealand bonds - NZDMO cuts near-term bond issuance but lifts medium-term outlook

New Zealand's Debt Management Office has revised its bond issuance plans, reducing short-term issuance while increasing its medium-term outlook. The current plan includes NZ$35 billion of government bonds in the fiscal year 2025/26, down from NZ$38 billion, reflecting improved cash flows and reassessment of funding needs. This reduction eases supply pressures in the bond market, likely viewed positively by investors following previous heavy issuances that raised yields. However, the medium-term issuance forecast through June 2029 has been lifted to NZ$135 billion, indicating substantial ongoing fiscal pressures and borrowing needs. This situation aligns with careful monitoring by investors on monetary policy and fiscal settings interaction. Ultimately, while there may be short-term relief from reduced supply, the necessity for sustainable borrowing remains evident.