New Zealand bonds close narrowly mixed following disparate set of economic data; investors await GDT price auction

New Zealand government bonds closed narrowly mixed Tuesday, following a disparate set of economic data released overnight. Also, investors’ are awaiting the GlobalDairyTrade (GDT) price auction to be held today for further direction in the debt market.

At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, jumped 2 basis points to 2.89 percent, the yield on 20-year climbed 2-1/2 basis points to 3.37 percent and the yield on short-term 2-year also ended 2-1/2 basis points higher at 2.00 percent.

According to the NZIER’s, business confidence fell in the December quarter, in the wake of the recently formed Labour-led Government. Further, general sentiment fell from +5 to -11, the lowest reading in more than two years. However, the own-activity measures, which correspond more closely with GDP, saw more modest declines. Activity over the last three months fell from +13 to +10, while expectations for the next three months fell from +26 to +18.

Further, retail spending rose modestly in December, with a 0.5 percent gain over the month, in line with market forecast. December’s increase in spending was mainly due to increased spending on fuel as a result of price increases. Looking at ‘core’ retail categories, spending was actually down 0.2 percent over the month.

Meanwhile, the NZX 50 index closed 0.48 percent higher at 8,250.54, while at 06:00GMT, the FxWirePro's Hourly NZD Strength Index remained highly bearish at -117.06 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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