US Treasury rates were lower across the curve, with a slight flattening bias, with the 2-year rate down 2 bps to 1.31% and the 10-year rate down 4 bps to 2.50%.
The latter now seems well settled back into the familiar 2.30-2.60% range after the break-out scare pre the Fed rate hike last week.
The market remains short US Treasuries, so there is still a bit of a hurdle to see a sustainable break through the top of that range.
A number of Fed speakers will be on the circuit this week, so it will be interesting to hear their perspective. With a lack of key economic releases this week, they’ll probably garner more attention than deserved.
The local market saw a steeper yield curve on Friday, a reflection of the previous US trading session. Some of that is likely to unwind today.
The 2-year swap rate closed up 1 bp 2.30% while the 10-year rate was up 4.5 bps at 3.555%. Expect tight ranges to prevail this week, given the lack of scheduled releases.
Only a shock from the RBNZ – not expected – would rock the market.
Daily swap rates
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Jason Wong is on the BNZ Research team. All its research is available here.
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