Austria sells century bond into huge demand. German and US 10yr rates rise sharply. Receiving interest strong in local markets

By Jason Wong

In the bond market higher UK bond yields spilled over into German and US rates, with higher risk appetite supporting the move.

Germany’s 10 year rate rose by 6 bps to 0.40% while the US 10-year rate is up 4 bps to 2.17%, now 16 bps higher than Friday’s intra-day low.

Fed Fund futures are back to pricing in about a 1 in 3 chance of a hike by year-end but one still has to look beyond 2018 to see the next full rate hike priced in.

It’s not all bad news in the bond market.  Austria sold €3.5 bn of 100-year bonds priced at just 2.11%, the largest century bond to hit the market, with bids totalling €11.4bn.

NZ’s rates market performed well yesterday.  Receiving interest in the swaps market was prevalent all day and the swap curve showed little change in yield despite the upward pressure to rates from global forces.

A 5-year Kauri from the World Bank was announced, adding to the receiving theme. Upward pressure from global forces will continue today.

Daily swap rates

Select chart tabs »
The '1 year %' chart will be drawn here.
Loading...
Opening daily rate
Source: Westpac
The '2 years %' chart will be drawn here.
Loading...
Opening daily rate
Source: Westpac
The '3 years %' chart will be drawn here.
Loading...
Opening daily rate
Source: Westpac
The '4 years %' chart will be drawn here.
Loading...
Opening daily rate
Source: Westpac
The '5 years %' chart will be drawn here.
Loading...
Opening daily rate
Source: Westpac
The '7 years %' chart will be drawn here.
Loading...
Opening daily rate
Source: Westpac
The '10 years %' chart will be drawn here.
Loading...
Opening daily rate
Source: Westpac

Jason Wong is on the BNZ Research team. All its research is available here.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment or click on the "Register" link below a 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.