New Zealand bonds close flat in muted trading week; U.S. Treasuries jump ahead of JOLTs data

New Zealand bonds closed flat Tuesday as investors remained muted amid lack of economically significant data throughout this week. However, the United States counterpart jumped ahead of the labour market data scheduled for later this week and the JOLTs job openings data, due later today.

At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, remained flat at 2.88 percent, the yield on the long-term 20-year note slipped 1 basis point to 3.20 percent and the yield on short-term 2-year closed steady at 1.86 percent.

US president Trump stole headlines again overnight, with the USTR publishing a list of an additional US$200b of Chinese imports that may face 10% tariffs after a public consultation period that will end on August 30.

This list includes items from TV components, air conditioners, apparel, leather goods, electric vehicle batteries, refrigerators, photocopiers, drying machines, frog legs, and many types of seafood and fruits etc. USTR Representative Lighthizer opined that “unfortunately, China has not changed its behaviour – behaviour that puts the future of the US economy at risk.

While Wall Street closed higher amid earnings season optimism, S&P500 futures tumbled and UST Treasury bonds rallied. Expect a risk-off tone to prevail over Asian markets today as investors prepare for the next escalation of US-Sino trade tensions and China’s response.

Meanwhile, the NZX 50 index closed 0.24 percent lower at 9,001.39, while at 06:00GMT, the FxWirePro's Hourly NZD Strength Index remained slightly bearish at -100.69 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex