New Zealand bonds close lower ahead of Q3 CPI, GDT price index

The New Zealand government bonds closed lower Monday as investors await third quarter consumer inflation and GlobalDairyTrade (GDT) price index figures.

The yield on the benchmark 10-year bond, which moves inversely to its price, rose 5 basis points to 2.560 percent, the yield on 7-year note ended 3 basis points higher at 2.245 percent and the yield on short-term 2-year note climbed 1 basis point to 1.920 percent.

The services sector of New Zealand economy expanded at a slower pace during the month of September, with the unit’s Purchasing Managers’ Index (PMI) remaining well above the 50-point threshold mark that demarcates expansion from contraction in economic activity.

The BNZ-BusinessNZ performance of services index declined to a seasonally adjusted 54.1 in September from an eight-month high of 57.9 in August. However, all of the five sub-indexes remained above the 50 level that separates contraction from expansion.

Moreover, New Zealand’s October ANZ consumer confidence index rose 1.6 percent m/m, from 2.8 percent in September. Similarly, ANZ inflation gauge rose 0.2 percent m/m in September, for the third quarter it climbed 0.1 percent q/q and 2.1 percent y/y.

According to reports from the NZ press, the RBNZ is expected to cut rates in November, citing, Governor McDermott speech on last Tuesday on 'Understanding Low Inflation in New Zealand'.

Meanwhile, the New Zealand’s benchmark S&P/NZX50 Index closed down 66.89 points to 7,066.37.