New Zealand bonds end mixed on safe-haven demand following worries over natural disasters

The New Zealand bonds ended mixed Friday as investors poured into safe-haven assets, following rising tensions over the natural health of the global economy and as the riskier assets remain heavily prone to any economic fluctuations, largely owing to natural disturbances.  

At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, slumped 2-1/2 basis points to 2.79 percent, the yield on 7-year note slipped 1 basis point to 2.65 percent while the yield on short-term 2-year ended 2 basis points higher at 2.00 percent.

US Treasuries made further gains on Friday, driving yields to their lowest level since the day after Donald Trump was voted into the White House and building on their biggest rally since March from earlier in the week. The rally in Treasuries comes as geopolitical risks centered on North Korea continue to weigh on investors’ minds and Hurricane Irma, the strongest Atlantic storm on record, tearing through the Caribbean on its way to Florida – in addition to dovish policy rhetoric from a US Federal Reserve governor, FT reported.

The economy is showing late-cycle behavior where capacity constraints and a moderation in the housing market are crimping growth. However, the economy has enough impetus from other areas (commodity prices, fiscal policy, and household incomes) for the economic expansion to extend.

Meanwhile, the NZX 50 index ended 0.18 percent higher at 7,804.26, while at 06:00GMT, the FxWirePro's Hourly NZD Strength Index remained slightly bullish at 81.87 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest