By Kymberly Martin
In fairly quiet trading, NZ swaps and bonds closed down 3bps across the curve on Friday.
2-year swap, at 3.45%, sits around 10bps below its mid-month highs.
The 2-10s curve remains close to two year highs at 159bps.
On Friday night ‘benchmark’ bond yields were paddling sideways ahead of the release of US new home sales data.
Following the data US 10-year yields slumped from above 2.90% to sit around 2.82%.
30-year yields fell by a similar magnitude to 3.80%.
There are now just four weeks until the Sep 18 FOMC meeting when the US Fed is widely expected to begin to ‘taper’ its asset purchases.
In the lead up to the meeting housing data should now gain as much, if not more scrutiny, as labour market and inflation read-outs.
This week, Wednesday will bring US pending home sales and MBA mortgage applications. The Fed’s Bullard is also scheduled to speak twice at the end of week. For tonight, the US will deliver durable goods orders.
Today NZ will release its July trade balance. In a relatively quiet week for domestic data, Thursday’s ANZ business survey will be the highlight.
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