New Zealand bonds close up on investor uncertainty over Turkey’s political chaos; Q2 producer price index eyed

The New Zealand bonds closed up on Wednesday as investors still remain uncertain over Turkey’s political chaos, although sentiments have started to stabilize, with the CBRT’s invention to adopt measures in controlling the lira’s downtrend.

Investors will now remain focussed on the country’s producer price index (PPI) data for the second quarter of this year, scheduled to be released on August 16 by 22:45GMT for further direction in the debt market.

At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, slipped nearly 1 basis point to 2.59 percent, the yield on the long-term 20-year note also fell 1 basis point to 2.92 percent and the yield on short-term 2-year closed 1 basis point lower at 1.72 percent.

Turkish markets have recently been tumbling very intensively. There was already pressure on Turkish markets before the negative news from Turkey came, given that the funding cost of the US dollar was going up, amid the tightening of the monetary policy of the US Fed. The more recent developments intensified the tensions on Turkish markets much further, however, according to the latest research report from ERSTE Group.

Meanwhile, the NZX 50 index closed 0.17 percent higher at 8,987.49, while at 07:00GMT, the FxWirePro's Hourly NZD Strength Index remained neutral at -69.11 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex