New Zealand bonds surge at close in tandem with U.S. counterpart ahead of latter’s January CPI data

New Zealand government bonds surged at the time of closing Wednesday, tracking overnight movement in the U.S. counterpart ahead of the latter’s consumer price inflation data (CPI) for the month of January, scheduled to be released later today.

At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, slumped 3-1/2 basis points to 2.96 percent, the yield on 20-year plunged 4 basis points to 3.47 percent and the yield on short-term 2-year closed 1/2 basis point lower at 1.87 percent.

The Labor Department is set to release its monthly Consumer Price Index (CPI) data on Wednesday, the next inflation update for investors. That report, along with the Producer Price Index (PPI) data on Thursday, will be scrutinized by both traders and Federal Reserve officials for any signs of price movement in the economy.

The RBNZ’s Survey of inflation expectations was fairly steady overall. The two-year ahead measure, which is often considered the headline result, jumped from 2.02 percent last quarter to 2.11 percent this quarter. However, this was at odds with the one year ahead measure and the longer-term measures of inflation expectations, which were all broadly steady.