In the global bond market, rates were generally higher, with Germany’s 10-year rate up 2 bps to its highest level in 2-years of 0.62%.
US 10-year Treasury yields drifted higher, up 4 bps from the NZ close to 2.66%, threatening to break out. The 2.66-2.67% level was tested a number of times last week but that level has held, after the steady increase over the first three weeks of the year.
The local market was quiet, with the Australia day holiday a factor, and Friday night’s moves should impart an upside bias to rates as the new week begins.
The dataflow picks up a gear as the week progresses, culminating in the US employment report on Friday.
Ahead of that the FOMC is expected to play a straight bat, with the market convinced that the Fed will hold off another rate hike until the March meeting.
Only second-tier local data is scheduled this week, with Australian CPI and China PMI data offering the chance of some spillover for the NZD and rates.