New Zealand bonds close tad higher ahead of GDT price auction, Q3 GDP data

New Zealand government bonds closed tad higher Monday as investors wait to watch the country’s GlobalDairyTrade price auction and the third-quarter gross domestic product (GDP) data due through this week.

At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1 basis point to 2.73 percent, the yield on 20-year note slid 1/2 basis point to 3.26 percent while the yield on short-term 2-year ended 1 basis point higher at 1.94 percent.

This week’s GDP report is expected to show that economic growth slowed to just 0.4 percent through the September quarter. In part, this slowdown reflects the impact of some temporary factors. Poor weather through the middle part of the year put a dampener on agricultural production.

"We expect that GDP growth over 2017 as a whole will come in at just 2.4 percent. That’s down from 3 percent over 2016. And after adjusting for rapid population growth over the past year, we’re left with a picture of relatively flat per capita economic growth," Westpac Research commented in its recent report.

Meanwhile, the NZX 50 index closed 0.20 percent lower at 8,344.15, while at 06:00GMT, the FxWirePro's Hourly NZD Strength Index remained slightly bullish at 77.31 (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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