New Zealand bonds end higher ahead of GDT price action

The New Zealand bonds ended higher Tuesday as investors wait to watch the country’s GlobaldairyTrade (GDT) price auction, scheduled to be held later today amid a silent trading week. 

At the time of closing, the yield on the benchmark 10-year bond, which moves inversely to its price, slumped 2-1/2 basis points to 3.02 percent, the yield on 7-year note also plunged 2-1/2 basis points to 2.92 percent and the yield on short-term 2-year note ended 4 basis points lower at 2.08 percent.

The NZIER Quarterly Survey of Business Opinion for the June quarter generally pointed towards continued firm economic conditions. After adjusting for normal seasonal variations, a net 18 percent of businesses reported that trading conditions have improved over the past three months, and a net 23 percent expect that they will continue to. Both of those results are down a little from the levels seen earlier this year. Nevertheless, trading conditions remain healthy, consistent with solid economic growth through mid-2017.

In the last GDT price auction on June 21, dairy prices fell 0.8 percent, the first fall since early March, driven by a 3.3 percent drop in whole milk powder prices. However, skim milk powder prices rose 1.4 percent, and fat products continued to reach new highs.

Meanwhile, the New Zealand’s benchmark S&P/NZX 50 Index closed 0.42 percent higher at  7,620.64 while at 06:00GMT, the FxWirePro's Hourly NZD Strength Index remained neutral at 1.34 (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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