New Zealand bonds decline in subdued trading session, upbeat terms of trade weigh

The New Zealand government bonds declined Wednesday as investors remained sidelined in subdued session that witnessed data of little economic significance. Further, upbeat reading of the country’s Q4 terms of trade weighed on investor sentiments as well.

The yield on the benchmark 10-year bond, which moves inversely to its price rose 1 basis point to 3.32 percent at the time of closing, the yield on 7-year note jumped nearly 2-1/2 basis points to 2.87 percent and the yield on short-term 2-year note traded 1 basis point higher at 2.21 percent.

New Zealand’s terms of trade rose in the final three months of 2016 as the recovery in global dairy prices bolstered the value of exports even as the volume of international sales shrank.

The merchandise terms of trade, which measures the purchasing power of the country’s exports, rose 5.7 percent in the fourth quarter after a 1.1 percent decline in the third quarter, Statistics New Zealand said.

Meanwhile, the New Zealand’s benchmark S&P/NZX 50 Index closed 0.26 percent lower at 7,148.78, while at 05:00 GMT, the FxWirePro's Hourly NZD Strength Index remained highly bearish at -110.97 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex