New Zealand bonds close flat in subdued trade as UK heads toward a hung Parliament

The New Zealand remained flat at the time of closing Friday in a silent trading session that witnessed no significant data. However, the ongoing distress surrounding the notion of a hung Parliament in the UK, after Prime Minister Theresa May failed to secure a winning majority has added further sluggishness to the country’s debt market.

At the time of closing, the yield on the benchmark 10-year bond, which moves inversely to its price, hovered around 2.78 percent, the yield on 7-year note also traded flat at 2.68 percent and the yield on short-term 2-year note ended 1/2 basis point lower at 1.95 percent.

With the bulk of seats declared in the General Election, no party has gained a clear majority and the U.K. now faces a hung parliament. Prime Minister Theresa May's ruling Conservative party has won 312 seats while the opposition Labour Party, led by Jeremy Corbyn, has 260 seats.

There are 650 seats in total and 326 are required for a party to secure a parliamentary majority, meaning the country now faces further political negotiations. The political deadlock is also expected to hurt upcoming Brexit negotiations as well as May's political future, according to strategists.

Meanwhile, the New Zealand’s benchmark S&P/NZX 50 Index closed 0.30 percent lower at 7,436.10 while at 06:00GMT, the FxWirePro's Hourly NZD Strength Index remained highly bullish at 138.66 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex