New Zealand bonds close modestly weak in subdued trade, Trump’s speech in focus

The New Zealand government bonds remained modestly weak at the time of closing amid a relatively subdued trading session Wednesday. Also, investors are curiously eyeing the United States President-elect Donald Trump’s speech later in the day for further guidance in the debt market.

In intraday trading, the yield on the benchmark 10-year bond, which moves inversely to its price, rose 1 basis point to 3.22 percent, the yield on 7-year note also climbed 1 basis point to 2.86 percent and the yield on the short-term 2-year note moved 1/2 basis point higher to 2.24 percent by 05:15GMT.

The New Zealand bonds have been closely following developments in the U.S. debt market. The benchmark 10-year bond yields splurged nearly 2 basis points to 3.22 percent ahead of the 10-year note auction and Trump’s speech scheduled for today.

Moreover, slow buying activity was observed as investors maintained their appetite in riskier assets including crude oil and equities. The International benchmark Brent futures rose 0.17 percent to USD53.73 and West Texas Intermediate (WTI) gained 0.30 percent to USD50.97 by 05:25 GMT.

Lastly, at Fonterra's GlobalDairyTrade auction last week, the GDT price index fell 3.9 percent to USD3,463, down from USD3,656 at the previous auction two weeks ago. Some 22,396 tonnes of product was sold, edging up from 22,321 tonnes at the previous auction. Whole milk powder dropped 7.7 percent to USD3,294 a tonne.

Meanwhile, the New Zealand’s benchmark S&P/NZX50 Index closed 0.45 percent higher at 7,069.59, while at 5:00GMT, the FxWirePro's Hourly NZD Strength Index remained neutral at 19.04 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex