By Kymberly Martin
NZ swaps closed little changed yesterday. Overnight, US 10-year yields pushed up to 2.76%.
Post yesterday morning’s release of US FOMC Minutes saw US bonds yields push a little higher. However, there was only limited follow through in NZ markets.
The release of the disappointing HSBC flash China PMI in the afternoon then saw yields dip lower, to close not far from where they opened.NZ 2 and 5-year swap sit at 3.81% and 4.50% respectively.
The recent pickup of new issues in the NZ fixed income space continued yesterday.
While Christchurch City Council issued $45m of paper, Auckland Council announced it planned to issue a 10-year retail bond. Auckland International Airport and ANZNZ were also in the headlines.
This issuance will be welcomed by a market starved of supply in recent times. We therefore do not expect the supply to lead to much wider credit spreads. These have remained fairly tight even during recent emerging market ructions.
Overnight, US 10-year yields traded from intra-night lows of 2.70% to sit around 2.76% currently.US data was mixed, accounting for some volatility in the move higher in yields.
Today the NZ Crown Financial Statements will be released. Otherwise it’s a fairly quiet end to the week domestically. Across the Tasman, G20 finance ministers kick off their meeting in Sydney.
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