New Zealand bonds remain mixed at close as investors await GDT price auction, RBNZ policy decision

The New Zealand bonds remained mixed at the time of closing Monday as investors are eyeing the GlobalDairyTrade (GDT) price auction, scheduled to be held on June 20. In addition, the Reserve Bank of New Zealand’s (RBNZ) monetary policy decision, due on late Wednesday will add further direction to the debt market.

At the time of closing, the yield on the benchmark 10-year bond, which moves inversely to its price, fell 1 basis point to 2.78 percent, the yield on 7-year note hovered around 2.68 percent and the yield on short-term 2-year note jumped 2-1/2 basis points to 1.98 percent.

In the last GDT price auction, dairy prices rose 0.6 percent, following a 3.2 percent gain previously. This was the 6th successive gain with prices rising close to 15 percent in the past two months.

"We expect the Reserve Bank to hold the OCR at 1.75 percent and to maintain a neutral outlook for interest rates," Westpac commented in its latest research report.

Lastly, the country’s Westpac McDermott Miller Consumer Confidence survey recorded a 1.5 point rise in June, taking the index to 113.4, the highest since early 2015. And looking into the breakdown of this quarters survey, gains in confidence have been widespread, both geographically and by income levels.

Meanwhile, the New Zealand’s benchmark S&P/NZX 50 Index closed 0.52 percent higher at 7,592.03 while at 05:00GMT, the FxWirePro's Hourly NZD Strength Index remained neutral at 5.91 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex