The US 10-year Treasury rate was in a tight range, but yields have slipped following US economic data and [US Fed's] Brainard’s comments have cemented the move.
The current yield is around 2.21%, down 3 bps for the day.
With CFTC data showing the largest net long positioning in US10s futures in nearly 10 years, we’d argue that a lot of the news on soft growth and inflation is currently in the price and risks are asymmetrically skewed to the upside for yields on a 1-3 month view.
NZ rates were little changed yesterday, with a slight downside bias to the longer end of the curve.
Expect a further nudge lower today.
The RBNZ’s financial stability report is released at 9am but this rarely moves the market. Risks in the dairy sector have faded, but the housing market likely still remains an area of concern for the Bank.
Elsewhere, it’s a full economic calendar today.
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Jason Wong is on the BNZ Research team. All its research is available here.
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