By Raiko Shareef
NZ swaps closed 2 bps to 4 bps higher on Friday, partially reversing the post-RBNZ slide.
The 2-year swap yield rose by 2 bps to 4.11%.
It was an understandably quieter day, with the local market looking forward to the weekend after a busy Thursday.
The only local data of note was the ANZ business confidence survey, in which the headline confidence number dropped from 42.8 to 39.7 in July. But at 45.1, the “own activity” indicator is still consistent with growth well above what we and the RBNZ are forecasting. The details also showed rising pricing intentions and inflation expectations, which the RBNZ will note during its current pause in the hiking cycle.
US bond yields initially received a boost from the stronger headline readings for the June US durables goods orders report. Headline orders rose +0.7% against +0.5% expected, while orders ex-transport +0.8% versus +0.5% expected, and the capital goods non-defence ex-aircraft series gained +1.4% versus +0.5% expected.
However after the initial reaction, weakness in the capital goods shipments number (-1.0% vs +1.3% expected) saw some analysts downgrading their Q2 GDP forecasts (some to now just a shade above 3%), and was one factor helping bonds reverse course.
The 10-year bond yield slid 4 bps for the day to 2.47%.
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