New Zealand bonds witness mild selling ahead of Q4 CPI data, RBNZ’s Wheeler also in focus

The New Zealand government bonds witnessed mild selling along the curve Wednesday as investors remain keen to watch the fourth quarter consumer price inflation (CPI) data, due to be released Thursday.

Also, the Reserve Bank of New Zealand’s (RBNZ) Governor Graeme Wheeler’s speech on the same day is eyed by market participants.

The yield on the benchmark 10-year bond, which moves inversely to its price, jumped 5-1/2 basis points to 3.30 percent at the time of closing, the yield on 7-year note also ended 4 basis points higher at 2.95 percent and the yield on short-term 2-year note rose 1-1/2 basis point to 2.30 percent.

The country’s headline inflation is likely to have accelerated in the fourth quarter. According to an ANZ research report, the headline CPI is expected to have accelerated 0.3 percent sequentially, a tad above RBNZ’s November MPS pick of 0.2 percent. Annual inflation is anticipated to rise to 1.2 percent.

Lastly, the RBNZ Governor Wheeler’s speech, along with a host of significant economic data next week, remains in prime focus, that includes, labor market report and trade balance data.

Meanwhile, the New Zealand’s benchmark S&P/NZX50 Index closed 0.38 percent higher at 7,090.91, while at 6:00 GMT, the FxWirePro's Hourly NZD Strength Index remained neutral at 19.13 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex