US 10-year Treasury yields are trading close to their low for the day at 2.3650%, down 2 bps from the NZ close.
Yield curve flattening remains relentless, as more conviction in Fed tightening ahead sees the 2-year rate up 2 bps to 1.83%.
The higher bias to global rates during the local session drove higher rates across the NZ curve, with the 2-year swap rate up 2 bps to 2.16% and the 10-year rate up 3 bps to 3.13%.
Spencer’s speech had more impact on the NZD than the rates market, although the slightly more hawkish interpretation supported the upside pressure to rates already prevailing at the time.
In the day ahead, Australian GDP data are released, with base effects likely helping lift the annual increase to a solid 3.0%. The Bank of Canada isn’t expected to hike rates, but a tightening bias should remain, with the market expecting the next hike around March next year.
In the US, ADP employment figures will be released.