New Zealand bonds close narrowly mixed ahead of Q1 employment report, GDT price auction

New Zealand government bonds closed Tuesday session on a mixed note as investors awaited first quarter employment report and GlobalDairyTrade price auction ahead of the next week’s RBNZ monetary policy decision.

At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, fell 1 basis point to 2.82 percent, the yield on the long-term 20-year note also dipped 1 basis point to 3.75 percent and the yield on short-term 2-year closed 2 basis points higher at 1.91 percent.

Investors will now remain focused on the country’s GlobalDairyTrade (GDT) price index and employment report for the first quarter of this year, both scheduled to be released on May 1, for further direction in the debt market.

Moreover, the markets will also await the Reserve Bank of New Zealand next monetary policy decision, where it is expected to do nothing. However, we believe that the central bank could hike interest rate any time by early next year.

In the United States, Treasuries traded rangebound during a relatively quiet session. Markets now look ahead to a greater flow of data on Tuesday, highlighted by ISM manufacturing, construction spending and vehicle sales releases. However, the clear focus this week remains on the April employment report on Friday markets expect a non-farm payroll increase of +188K, alongside a decrease in the unemployment rate to 4.0 percent.

Meanwhile, the NZX 50 index closed 0.09 percent lower at 8,435.97, while at 06:00GMT, the FxWirePro's Hourly NZD Strength Index remained slightly bearish at -87.48 (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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