Two more Fed speakers (both non-voters) were on the circuit with opposing views. Known hawk Mester told reporters after a speech that four months of softening inflation haven’t changed her outlook for the economy or her preference for continued gradual rate hikes. Uber-dove Bullard said the absence of inflation pressures gives the central bank scope for patience.
NZ’s swap curve barely changed, with the 2-year rate flat at 2.205% and the 10-year rate down 1bp to 3.1350%.
There was more action in the bond market, with strong demand for the tender of NZ 20-year government bonds, the last auction for that particular bond for at least three months, seeing the yield fall for the day by 5.5bps to 3.27%. With the government’s next nominal bond tender some four weeks away, a lack of forthcoming supply helped drag down rates across the curve. Anecdotal evidence suggests good demand for NZ’s “high-yielding” government bonds. The 10-year bond fell by 3.5bps to 2.725%.
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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