sign up log in
Want to go ad-free? Find out how, here.

Markets await UK referendum results. US rates trade in tight range, ignoring booming US house sales. Another NZGB tender today

Bonds
Markets await UK referendum results. US rates trade in tight range, ignoring booming US house sales. Another NZGB tender today

By Jason Wong

US Treasuries broke a four-day losing streak, with yields down a touch in quiet trading conditions.

The 10-year rate has traded in a tight 3 bps range of 1.68-1.71%, and is currently down 2 bps at 1.69%, helped by strong demand at the 7-year auction.

There’s been little data this week to drive the market and the focus has been the upcoming UK referendum. 

US sales of existing homes rose to their highest level in more than nine years and prices climbed to a new peak in May, in line with market expectations.

There was nothing much to drive the local rates market yesterday.  Swap rates were marked higher, in line with global rates, with the 2-year rate up 2 bps to 2.33% and the 10-year rate up 3 bps to 2.86%. 

There are no major releases in NZ or Australia today so it’ll be another lazy day for the traders, as they wait out the results of the referendum.

The DMO will tender $150m Apr-2033 bonds today.  Recent demand for NZ bonds has been strong, with increased interest from offshore.  It will be interesting to see how the tender goes, given the recent strength of the NZD and the proximity of the UK referendum.

Tonight we get a series of PMI indicators in the US and Europe, but they are unlikely to garner much attention.  The general view on the trading floor is that everyone will be glad to have the UK referendum behind us and normal trading conditions resume.

Daily swap rates

Select chart tabs

Opening daily rate
Source: NZFMA
Opening daily rate
Source: NZFMA
Opening daily rate
Source: NZFMA
Opening daily rate
Source: NZFMA
Opening daily rate
Source: NZFMA
Opening daily rate
Source: NZFMA
Opening daily rate
Source: NZFMA
 

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.