New Zealand bonds end higher ahead of next week’s GlobalDairyTrade price auction, RBNZ policy meet

New Zealand government bonds ended Friday’s session on a higher note amid a silent trading day that witnessed data of little economic significance. Investors will now focus on the country’s GlobalDairyTrade (GDT) price auction and the Reserve Bank of New Zealand’s monetary policy meeting, both scheduled to be held by early next week for further direction in the debt market.

At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, remained flat at 2.82 percent, the yield on the long-term 20-year note also fell nearly 1-1/2 basis points to 3.13 percent and the yield on short-term 2-year closed nearly 2 basis points lower at 1.84 percent.

Notable market developments overnight saw S&P500 rallying on the back of tech stocks as Apple’s market cap crossed USD1 trillion, while the 10-year UST bond yield slipped below 3 percent again to 2.986 percent, and the USD gained amid signs of potential escalation in US-Sino trade tensions. US Commerce Secretary Ross warned China that "we have to create a situation where it’s more painful for them to continue their bad practices than it is to reform", but China’s retort to the US was to stop the "blackmailing and pressuring".

Asian markets may trade sideways today, awaiting tonight’s US labour market report (specifically the nonfarm payrolls, unemployment rate and average hourly earnings where market is eyeing 193k, 3.9 percent and 2.7 percent y/y respectively). Other economic data releases include US’ non-manufacturing ISM, services PMI, and June trade deficit, services and composite PMIs from Europe, UK and China Caixin, as well as Malaysia’s June trade data, OCBC Treasury Research reported.

Meanwhile, the NZX 50 index closed 0.17 percent higher at 8,864.52, while at 06:00GMT, the FxWirePro's Hourly NZD Strength Index remained highly bearish at -103.52 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex