NZ fixed interest market pricing will get a qualitative boost this week following a landmark deal between Bloomberg and the NZ Financial Markets Association (NZFMA).
Under the new arrangement announced this morning, the NZFMA, the professional body for the country’s wholesale banking and financial markets, will source real-time data via the Bloomberg ‘B-PIPE’ system.
According to the statement, B-PIPE provides pricing and index data compiled from “35 million instruments across all asset classes, including data aggregated from more than 330 exchanges and 5,000 contributors”.
The NZFMA, which is responsible for calculating and distributing local official pricing and reference rates for local over-the-counter markets, recently updated its methodology to bypass the previous bank panel process to set daily open and close prices.
In a statement, Bloomberg says: “The B-PIPE data supplied to NZFMA will be used in calculations for a range of tradable financial instruments, such as: New Zealand Government Bonds; New Zealand Swap Closes; New Zealand Bills/LIBOR; New Zealand OIS Close and New Zealand Credit Markets.”
The new process will see NZ credit market closing data change format from the current spread reporting to “an outright yield, or price basis, which eliminates the need to calculate the closing rate manually,” the statement says.
“To promote consistency of data for market participants when marking their end-of-day positions, Bloomberg will also provide calculated spread data for fixed rate credit bonds and the discount margins for floating rate notes,” Bloomberg says.
Heena Chakravorti, Bloomberg Oceania head, said the B-PIPE data would improve the quality and accuracy of NZ closing market rates.
“B-PIPE supports NZFMA’s goal of maintaining the highest standards in the provision of financial benchmarks and closing market rates, making use of market leading technology to further enhance the efficiency of New Zealand’s financial system,” Chakravorti said in the statement.