New Zealand bonds close higher ahead of Q3 CPI, GlobalDairyTrade price auction

The New Zealand bonds closed higher at the start of the trading week Monday ahead of the country’s consumer price inflation (CPI) data for the third quarter of this year and GlobalDairyTrade (GDT) price auction, scheduled for today by 21:45GMT and on October 16 respectively.

At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, fell nearly 1-1/2 basis points to 2.668 percent, the yield on the long-term 20-year note slipped 1/2 basis point to 2.978 percent and the yield on short-term 2-year closed 1 basis point lower at 1.838 percent.

The local curve has steepened a touch, but ultimately is a casual bystander to the latest volatility in global fixed income markets. We don’t see that changing much, with ongoing outperformance likely on any further UST sell-offs, ANZ Research reported in its Strategy Weekly report.

Further, this week, Sino-US trade tensions may continue to be on investors’ radar screens. All eyes are expected to be on the US Treasury’s Report on foreign exchange practices of major trading partners with President Trump warning of further tariffs on China over the weekend, OCBC Treasury Research reported.

Meanwhile, the NZX 50 index closed 0.058 percent lower at 8,838.07, while at 06:00GMT, the FxWirePro's Hourly NZD Strength Index remained slightly bullish at 75.19 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex