New Zealand bonds close lower tracking U.S. Treasuries amid muted trading session

The New Zealand bonds closed lower Friday tracking United States’ Treasuries amid a muted trading session that witnessed data of little economic significance.

At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, rose climbed 2 basis points to 2.615 percent, the yield on the long-term 20-year note rose 1 basis point to 2.915 percent and the yield on short-term 2-year closed 1-1/2 basis points higher at 1.840 percent.

News of Trump’s phone call with Xi and the comment that trade talks are “going nicely” may reignite investors’ hope for the upcoming meeting at the G20. Wall Street extended its run of gains, however Apple’s holiday guidance weighed in extended trading.

Further, UST bond yields and the USD fell amid a weaker-than-expected manufacturing ISM data and uncertainties ahead of the upcoming US mid-term elections. Oil prices also slumped on the back of Iranian sanction waivers and higher US and OPEC supply.

Lastly, the US’ manufacturing ISM fell to a 6-month low of 57.7 in Oct, down from 59.8 in Sep, with the employment and new order gauges both declining to 56.8 and 57.4 respectively amid rising trade tensions, but the prices paid gauge jumped from 66.9 to 71.6 amid major storms, supply-chain bottlenecks and as "import tariffs and counter-tariffs are the biggest inhibitor to the expansion in manufacturing".

Meanwhile, the NZX 50 index closed 0.093 percent lower at 8,835.60, while at 06:00GMT, the FxWirePro's Hourly NZD Strength Index remained slightly bullish at 77.51 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex