sign up log in
Want to go ad-free? Find out how, here.

Local markets await RBNZ; UST 10yr yields rise on immediate supply issues

Bonds
Local markets await RBNZ; UST 10yr yields rise on immediate supply issues

By Raiko Shareef

NZ interest rates were unchanged in an extremely quiet trading session for local markets yesterday.

The whole curve was marked down by 1 bp, with the 2-year swap closing at 4.07%.

Of course, the local market is wary of moving too much ahead of the RBNZ’s meeting on Thursday.

We expect the RBNZ to be more dovish, but we still see the 2-year swap to break much below 4.0%.

The market currently prices an OCR not much above 4.25% in two years’ time.

The Bank’s medium-term commitment to ‘normalise’ the OCR will likely help keep short-end yields supported.

Offshore, US 10-year Treasury yields rose by 1 bp to 2.47%, its highest level in a month.

Rather than being data-driven, analysts point to a sizeable chunk of supply due this week as weighing on bond prices (and lifting yields).

Other news
* German exports strong at +4.7% m/m (+0.6 exp), but imports weak at -1.8% (+0.2% exp).
 
 
 
 
 
 
 
 

Daily swap rates

Select chart tabs

Opening daily rate
Source: NZFMA
Opening daily rate
Source: NZFMA
Opening daily rate
Source: NZFMA
Opening daily rate
Source: NZFMA
Opening daily rate
Source: NZFMA
Opening daily rate
Source: NZFMA
Opening daily rate
Source: NZFMA

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.