By Kymberly Martin
On Friday, in a rather quiet day of trading NZ swap yields closed up 2-3bps.US 10-year yields closed the week at 2.73%.
It was a fairly quiet day domestically so NZ swap yields pushed a little higher following the previous day’s moves offshore.
NZ 2 and 5-year swaps closed the week at 3.83% an 4.53% respectively. 5-year swap remains more than 20bps below its early January highs. However, we see 2 and 5-year swap at 4.60% and 5.20% respectively by year-end.
On Friday the Bank of Japan released its January minutes. These showed the Bank wanted to send a clear message to the market that its ambitious monetary easing would not be curtailed in two years’ time. This stands in contrast to the US Fed’s policy of gradually moving toward a less accommodative stance.
On Friday night, after slightly softer than expected January US existing homes sales data, US 10-year yields drifted lower into the close. From close to 2.78% they ended the week at 2.73%, still well within the 2.50-3.00% range we see in the months ahead.
In a week of steady domestic data flow ahead, today will kick off with NZ credit card billings, though these are unlikely to be market moving.
The key offshore events tonight will be the German IFO survey of business and Eurozone final CPI reading.
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