New Zealand 10-year bond yields end at 4-year high, tracking overnight movement in U.S. Treasuries

New Zealand 10-year government bond yields ended Thursday’s session on a 4-year high note, tracking overnight movement in the U.S. counterpart after the latter’s consumer price inflation data (CPI) for the month of January, topped market expectations, adding to hopes of a Fed rate hike in the immediate future.

At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, jumped 7 basis points to 3.03 percent, the yield on 20-year surged 7-1/2 basis points to 3.54 percent and the yield on short-term 2-year closed 1 basis point higher at 1.88 percent.

The yield on the 10-year U.S. Treasury note jumped to 2.92 percent during the overnight session, its highest level since January 2014, and slightly above the levels that sparked a stock-market sell-off earlier in the month. The move higher came after the government reported inflation in January rose by more than expected.

The new rate highs came after the Labor Department reported U.S. consumer prices climbed much more than expected in January, spurring inflation fears and worries that rates could climb higher.
The consumer price index rose 0.5 percent last month against projections of a 0.3 percent increase. Excluding volatile food and energy prices, the index was up 0.349 percent against estimates of 0.2 percent, the largest gain for the measure since March 2005.

Meanwhile, the NZX 50 index closed 0.06 percent higher at 8,063.33, while at 06:00GMT, the FxWirePro's Hourly NZD Strength Index remained highly bullish at 111.47 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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