New Zealand bonds remain downbeat at close as investors await GDT price auction

The New Zealand bonds closed on the downside Monday as investors remained cautious ahead of the GlobaldairyTrade price auction, scheduled to be held on July 4 amid a silent trading week. 

At the time of closing, the yield on the benchmark 10-year bond, which moves inversely to its price, jumped 9-1/2 basis points to 2.99 percent, the yield on 7-year note surged 9 basis points to 2.88 percent and the yield on short-term 2-year note ended 6 basis points higher at 2.09 percent.

Central banks’ reaction functions appear to be moving more towards financial stability risks. The New Zealand economy is well-placed to weather any volatility. That said, it is another factor leaving us cautious chasing the NZD around current levels and will be an additional headwind for the Auckland housing market.

This week’s NZIER QSBO should paint a decent picture, and signal that 3 percent plus GDP growth is on offer. Global milk powder prices are expected to ease.

Meanwhile, the New Zealand’s benchmark S&P/NZX 50 Index clsoed 0.30 percent lower at  7,588.43 while at 05:00GMT, the FxWirePro's Hourly NZD Strength Index remained neutral at 29.05 (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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