By Kymberly Martin
NZ swaps and bond yields closed down 4-5 bps across the curve.
Overnight US 10-year yields traded between 2.28% and 2.31%.
Yesterday the RBNZ released its inflations expectations data. These showed respondents expectations for 2-year-ahead inflation had declined further to 2.06% from 2.23%. This will allow the RBNZ comfort as it remains on hold for an extended period.
However, NZ swaps started to drift lower from early in the day, well ahead of the data release. 2 and 5-year swap closed at 3.88% and 4.15% respectively. We continue to see 2-year swap in a 3.85%-4.00% range in the near-term.
Overnight, German yields slipped back toward historic lows, despite an array of German Q3 data that failed to provide any nasty surprises. 10-year yields trade at 0.75% this morning.
Across the Atlantic, US 10-year yields pushed up from 2.29% to above 2.31%, after the second reading of US GDP showed upward revision to 3.9% (from 3.3%). But yields then fell back after the subsequent releases of US Nov consumer confidence (88.7 vs. 96.0 expected) and the Richmond Fed Manufacturing Index (4 vs. 16 expected).
Today, the RBNZ’s LVR ratio data for October will be released
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