By Kymberley Martin
Yields pushed higher across NZ curves yesterday.
Overnight, US 10-year yields traded between 2.53% and 2.56%.
Following the release of the HSBC China PMI yesterday, AU yields pushed abruptly higher.
The yield on AU 10-year bonds rose from 3.66% to 3.75%. Equally, the likes of AU 10-year swaps pushed up from 4.04% to 4.12%.
This move then set the tone for the NZ market.
NZ swaps closed up 3-6bps with a steepening of the curve. While 2-yer swap now sits at 3.98%, the 2-10s curve sits at 81bps.
The NZ bond curve also steepened.
The yield on NZGB23s rose 6bps to 4.31%. We reiterate that we suggest shortening NZGB duration as the yield on NZGB23s has dipped below 4.30%.
Overnight, as equities provided further modest returns, US Treasuries traded fairly tight ranges.
The yield on 10-year has traded between 2.53% and 2.56%. While it is difficult to see the immediate catalyst for a sell-off in Treasuries, there is definite reluctance for yields to break below the bottom of 11-month ranges, at 2.47%.
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