New Zealand bonds close unmoved in flat trade after investors defy solid rise in business confidence

The New Zealand bonds remained unnerved at the time of closing Thursday as investors remain sidelined in any major trading activity due to lack of any significant economic data. However, the solid sell-off in global bonds has cushioned any further fall in yields.  

At the time of closing, the yield on the benchmark 10-year bond, which moves inversely to its price, fell 1/2 basis point to 2.89 percent, the yield on 7-year note hovered around 2.79 percent and the yield on short-term 2-year note ended flat at 2.03 percent.

New Zealand’s Businesses’ confidence in the general economic environment rose strongly in June. In addition, businesses have become more upbeat about the outlook for activity in their own firms. Confidence remains at levels consistent with our expectations of firm GDP growth over 2017.

Lastly, the economy is performing solidly, though on some metrics such as GDP per capita the economic story is sub-par. Indicators point to solid momentum over the year ahead; businesses and consumers are confident and financial conditions are supportive. However, the economy does not have the capacity to accelerate sharply. Labour and credit constraints are headwinds, ANZ Research reported.

Meanwhile, the New Zealand’s benchmark S&P/NZX 50 Index climbed 0.80 percent at the time of closing to 7,685.45 while at 06:00GMT, the FxWirePro's Hourly NZD Strength Index remained slightly bearish at -98.44 (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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