US yields ended the week lower across the curve, with the 2-year rate down 3bps to 0.84% and the 10-year rate down 2bps at 1.87%.
There was little to drive the market apart from traders re-thinking positions in the post-FOMC aftermath.
US consumer confidence, measured by the University of Michigan survey was slightly on the weak side and 5-10 inflation expectations rose by 0.2 percentage points to 2.7%. But with the Fed making it obvious by its actions that it wasn’t data-dependent, despite its previous claims that it was, the market was in no mood to trade on those releases.
Local trading was quiet on Friday, but interest rate curves were marked down on the back of offshore moves. The 2-year swap rate fell by 2bps to 2.235%, while the 10-year rate fell by 3.5bps to 3.02%. The NZ 10-year government bond rate (2027) fell back below the 3% mark, down 6.5bps to 2.98%.
With a quiet week on the economic front for the regions that matter most for NZ, it should be fairly quiet in rates markets in the lead-up to Easter.
A number of Fed speakers will be on the circuit over the coming week or so, but with their credibility shot to pieces will anyone bother to listen?
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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