Skinny trading but yields rise both locally and internationally; eyes on Yellen testimony and RBA minutes

By Raiko Shareef

An unassuming start to the week for NZ fixed interest, with the market looking to be largely on hold ahead of the Q2 CPI report on Wednesday.

NZ swap yields were marked 1 bps higher across the curve, with domestic banks seemingly seeing continued mortgage flow.

That said, there was little to nothing actually traded on the day.

In global bond markets, a reversal of last week’s mild risk averse tone seems to have driven price action.

US 10-year Treasury yields rose for the first time in six sessions, up 3 bps to 2.54%. That said, the outright level remains relatively low.

In a similar vein, Portuguese government bonds are seeing some respite, as investors become less worried that Banco Espirito Santos’ payment hiccup is a sign of widespread malaise.

Portugal’s 10-year government bond yields are 6 bps lower at 3.80%.

Today’s data calendar looks slightly more promising.

After the RBA’s July Board Minutes this afternoon, the UK’s inflation report and US retail sales will be noteworthy releases.

But the main event will be Fed Chair Yellen’s testimony to US lawmakers, the first leg of which kicks off tonight.