New Zealand bonds end lower tracking U.S. Treasuries after Chinese officials recommend halting of bond purchases

New Zealand government bonds ended Thursday’s session on a softer note, tracking the similar trend in the U.S. counterpart after Chinese officials recommended halting purchases of U.S. Treasuries, in a bid to control the excessive bond-buying by the country, noted as the world’s largest holder of foreign-exchange reserves.

At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, rallied 1-1/2 basis points to 2.89 percent, the yield on 20-year also rose 1-1/2 basis points to 3.36 percent and the yield on short-term 2-year ended flat at 2.00 percent.

Benchmark yields in the US rose for the fifth day after officials in China reviewing the nation’s foreign-exchange holdings were said to have recommended slowing or halting purchases of Treasuries. The sentiment was already fragile earlier on Wednesday ahead of an issue of 10-year notes by the Treasury and a glut of supply from Europe.

China holds the world’s largest foreign-exchange reserves, at USD3.1 trillion, and regularly assesses its strategy for investing them. It isn’t clear whether the recommendations of the officials have been adopted, Livemint reported.

Meanwhile, the NZX 50 index closed 1.37 percent lower at 8,250.44;  FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest