The New Zealand government bonds closed flat Friday as investors remained sidelined in a mild trading session that witnessed data of little economic significance.
The yield on the benchmark 10-year bond, which moves inversely to its price fell 1 basis point to 3.42 percent at the time of closing, the yield on 7-year note also slipped nearly 1 basis point to 2.97 percent while the yield on short-term 5-year note traded 1 basis point higher at 2.23 percent.
Dairy prices fell 6.3 percent in the latest GlobalDairyTrade price auction, following a 3.2 percent decline a fortnight ago. Within this, powder prices performed poorly, with whole milk powder prices falling 12.4 percent to AUD2,794/MT, and skim milk powder prices falling 15.5 percent.
"With dairy prices known to gather momentum in both directions, dairy prices might push a bit lower in the near term. But with Chinese demand looking to be holding steady for now, and global supply still well shy of 2016’s peaks, we expect prices to remain well off 2016’s lows and expect to see some improvement in global dairy prices over the second half of this year," Westpac commented in its latest research report.
Further to that, recent comments from the Federal Reserve Chair Janet Yellen, specifying that a March rate hike is definitely on the cards, if the economy holds momentum, added to the rise in market expectations and investors have quite already price in for a rate hike this month.
Meanwhile, the New Zealand’s benchmark S&P/NZX 50 Index closed 0.51 percent higher at 7,177.59, while at 05:00 GMT, the FxWirePro's Hourly NZD Strength Index remained highly bearish at -102.81 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit https://www.fxwirepro.com/currencyindex