By Raiko Shareef
NZ interest rates edged higher on light liquidity on Friday, as local banks continued to pay at these levels.
Offshore receivers were apparently absent, allowing the 2-year swap to drift 1 bp higher to 4.07%.
Overseas bond markets were fairly subdued, with month-end flows lighter than expected.
With US data mixed, Treasuries were effectively unchanged for the day.
The 10-year Treasury yield rose just 0.7 bps to 2.34%.
With the US markets closed today for the Labor Day holiday, rates markets should be fairly subdued. That said, the rest of the week is action-packed, with no less than with no less than five central banks announcing policy decisions.
Of those, only the ECB is expected to take any action. We expect the Governing Council to cut interest rates by a further 0.10%, and provide further clarity on plans to purchase asset-backed securities.
Other news:
* Canada Q2 GDP +3.1% y/y vs +3.0% exp.
* UK Nationwide house prices +11.0% y/y vs +10.8 exp.
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