New Zealand bonds close tad higher despite hopes of slight rise in Q4 GDP

New Zealand government bonds close tad higher Tuesday even as market participants are anticipating a slight rise in the country’s gross domestic product (GDP) for the fourth quarter of last year, scheduled to be released on March 14 by 21:45GMT.

At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, slid 1/2 basis point to 2.99 percent, the yield on 20-year also slipped 1/2 basis point to 3.49 percent and the yield on short-term 2-year too closed 1/2 basis point lower at 1.97 percent.

Economic growth is expected to remain moderate but concerns of a slowdown are mounting as New Zealand’s economy moves further into the late cycle of its growth. Economists are picking last year’s fourth quarter GDP growth to come in between 0.6 percent-0.8 percent when figures are released on Thursday.

Westpac, whose 0.6 percent forecast is the most bearish of the major banks, says the fourth quarter of last year was just an average few months for the economy.

Meanwhile, the NZX 50 index closed 0.11 percent higher at 8,473.14, while at 06:00GMT, the FxWirePro's Hourly NZD Strength Index remained highly bullish at 151.04 (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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