New Zealand bonds jump at close ahead of GDT price auction, Q1 employment report

The New Zealand bonds jumped at the time of closing as investors wait to watch the country’s GlobalDairyTrade price auction, scheduled to be held on Tuesday. Also, the country’s first quarter employment report, scheduled to be released on May 3, is awaited by market participants.

At the time of closing, the yield on the benchmark 10-year bond, which moves inversely to its price, fell 1/2 basis point to 3.07 percent, the yield on 7-year note also slipped 1/2 basis point to 2.74 percent while the yield on short-term 2-year note plunged 2 basis points to 2.10 percent.

Employment intentions remain strong, with all sectors except agriculture expecting an increase in staff numbers going forward. The activity indicators from this month’s survey are consistent with our forecast for GDP growth continuing at an annual pace around 3 percent.

Lastly, inflation expectations remained unchanged from March at 1.83 percent. Pricing intentions rose considerably across most sectors, with the aggregate reaching the highest level since March 2015.The rise in pricing indicators from 2016’s lows is consistent with the surge in annual inflation to 2.2 percent in Q1.

Meanwhile, the New Zealand’s benchmark S&P/NZX 50 Index closed 0.05 percent higher at 7,382.22, while at 05:00GMT the FxWirePro's Hourly NZD Strength Index remained highly bearish at -119.37 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex