By Raiko Shareef
NZ swap yields slid 3 bps yesterday, largely reflecting moves offshore on Friday night.
The 2-year swap closed at 4.08%.
With the RBNZ on pause for the near term, we anticipate a pull-back in yield in the short and mid part of the swaps curve.
We would consider a fall in the 2-year swap below 4% an attractive hedging opportunity, given that we continue to see the OCR at 5% by early 2016.
US bond yields are higher today, led by a weak auction of 2-year notes. There, the US Treasury sold 2-year paper at the highest yield since May 2011.
That helped the 10-year bond yield gain 2 bps to 2.49%.
Tonight, investors eyeing the data calendar will focus on US house prices and consumer confidence.
But really, we expect a fairly staid affair ahead of the marquee events, which kick off on Wednesday evening.
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