The risk-off tone hasn’t prevented US Treasury yields from rising.
The 10-year rate is up 2 bps to 1.95%, but this should be seen in the context of the 35 bps plunge through January.
With less than one full rate hike for 2016 now priced into the curve, we think that US rates are probably close to the bottom of a trading range.
Yesterday, NZ swap rates were pushed down, following the strong rally in offshore trading Friday night.
The 2-year swap rate fell by 3 bps to 2.60%, while the 10-year rate fell by 4 bps to 3.38%.
The 2s10s spread remains in a tight trading range that looks to have been in place for 8 months now.
Coming Up
The RBA is expected to maintain its soft easing bias. Australia’s domestic economy has been showing more signs of life recently, so there doesn’t seem to be any urgency to cut rates again and the tone is likely to reflect that.
The GDT Dairy auction overnight is expected to show further falls in dairy prices, based on increased supply and the futures market indicator.
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.