Short term NZ swaps come under pressure as rush to fix grows

By Raiko Shareef

Safe-haven global bond yields sold off mildly yesterday, as concerns around Crimea unwound somewhat.

The US 10-year bond yield rose by 4bps to 5.69%, while UK and German 10-year yields are 2bps higher.

Here in New Zealand, short-term swaps continue to come under pressure in the wake of the RBNZ’s rate hike last week.

The 2-year swap closed 5bps higher at 4.06%.

We suspect that much of this paying pressure is coming from the mortgage books, thanks to increasing public awareness of further rate hikes.