New Zealand bonds jump at close despite expectations of rise in Q4 GDP

New Zealand government bonds jumped at the time of closing Wednesday even as market participants are anticipating a slight rise in the country’s gross domestic product (GDP) for the fourth quarter of last year, scheduled to be released today by 21:45GMT.

At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, slumped 4-1/2 basis points to 2.95 percent, the yield on 20-year also plunged 4-1/2 basis points to 3.45 percent and the yield on short-term 2-year too closed 1 basis point lower at 1.96 percent.

According to estimates from National Australia Bank (NAB), the country is expected to witness a steady quarterly gain of 0.7 percent, after 0.6 percent in Q3. This is what the Reserve Bank of New Zealand (RBNZ) expects too, with reference to its February Monetary Policy Statement, FX Street reported.

A quarterly expansion of 0.7 percent would set annual growth at 3.1 percent. While that wouldn't look so strong in per capita terms it will appear robust to the recent political transitions.

Meanwhile, the NZX 50 index closed 0.11 percent higher at 8,473.14, while at 06:00GMT, the FxWirePro's Hourly NZD Strength Index remained neutral at 2.78 (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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