By Kymberly Martin
NZ swaps opened down a fraction yesterday following the previous night’s offshore moves.
However, paying at the short-end soon stabilised yields. 2-year swap closed unchanged at 4.07%.
The long-end dipped lower with 10-year closing down 2bps, at 5.03%. The market appeared to show little response to yesterday’s QSBO release.
Overnight, as US equities provided modest positive returns, US Treasuries consolidated. However, the yield on US 10-year bonds slipped from around 2.71% to close to 2.67% early this morning.
Today, there are only electronic card transactions data to be delivered domestically.
Tonight, it will be all eyes on the US Fed Minutes from its 18-19 March meeting. In the press conference following the March meeting, Yellen’s comments that rate hikes could start ‘”six months” after the end of ‘tapering’, gained a lot of attention.
The market will look to the Minutes to confirm if this is now the Fed’s central tendency, or a slip of the tongue from the Chair.
Regardless, post the most recent payrolls data, it is difficult to see the Minutes containing anything likely to inspire a test of the top of recently tightly held ranges for US 10-year yields (2.60-2.80%).
Revisiting the lows appears more likely.
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