The Brussels terror attacks supported global bond markets. Germany’s 10-year rate fell 5bps to 0.18%, but since recovered to 0.21%. The US-10 year rate fell to a low of 1.88% and now trades flat for the day at 1.92%.
US data showed a slightly weaker than expected Markit PMI figure for March, but this is not as closely watched as the ISM data. Even less closely watched is the Richmond Fed manufacturing index, but that exploded higher from -4 to 22, the biggest one month advance in records back to 1993. Other East Coast manufacturing gauges have also improved of late, so the data bode well for the next nationwide ISM figure due 1 April. A strong figure would be negative for the bond market.
In the local rates market we saw yields push a little higher on the back of offshore moves. Yields across the futures strip were up 1bp, the government bond curve was 1.5bps higher at the short end and 3bps higher for the longest bond, while swap rates were slightly higher across the curve. With no local data and a sparse global calendar over the next 24 hours it’ll be another soporific trading session today.
Yesterday, S&P affirmed NZ’s AA foreign currency long-term rating and AA+ local-currency long-term rating. The rating agency cited NZ’s strengths with regards to monetary and fiscal flexibility, a resilient economy and institutions conducive to swift and decisive policy actions, which offset the vulnerabilities of NZ’s high external debt. As expected, this had zero impact on the market.
Daily swap rates
Select chart tabs
Jason Wong is on the BNZ Research team. All its research is available here.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.