New Zealand bonds slump at close on expectations of lower Q2 unemployment rate

The New Zealand bonds slumped at the time of closing Tuesday on expectations that the country’s unemployment rate for the second quarter of this year will come in lower than the previous reading in Q1. Also, investors wait to watch the country’s GlobalDairyTrade price auction, scheduled to be held later today which will provide further direction to the debt market.

At the time of closing, the yield on the benchmark 10-year bond, which moves inversely to its price, jumped to 3-week high, by 5 basis points to 3.06 percent, the yield on 7-year note jumped 4-1/2 basis points to 2.89 percent while the yield on short-term 2-year note ended 1/2 basis point higher at 2.12 percent.

NZ’s unemployment rate is expected at 4.8 percent, from prior 4.9 percent; employment change is seen at 0.7 percent q/q, from previous 1.2 percent q/q. Participation rate likely remained unchanged at 70.6 percent, while average hourly earnings expected to rise 0.9 percent, from 0.3 in the previous reading.

Meanwhile, the New Zealand’s benchmark S&P/NZX 50 Index jumped 0.71 percent to  7,693.99 while at 06:00GMT, the FxWirePro's Hourly NZD Strength Index remained neutral at 32.57 (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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