Market selloff affects bonds but yields stay within six week range. NZ rates accept no-surprise RBNZ OCR review with local tightening a distant prospect

By Jason Wong

US 10-year Treasuries have traded more or less in line with S&P500 spot and futures.

The 10-year rate traded as low as 2.80% when the sell-off in US equities was at its worst, and yields have climbed back up to 2.84% as US equities have recovered off their lows.  This keeps the 2.80-2.95% range seen over the past six weeks intact.

The NZ rates market didn’t react to the no-surprise RBNZ OCR Review.  Any tightening remains a distant prospect with the market not pricing in a full rate hike until about the middle of next year.

The 2-year swap rate closed the day down 1 bp to 2.24% while the 10-year rate was dragged down by global forces, seeing it 4 bps lower at 3.16%.

For local investors the day ahead looks uneventful, making for a quiet end to the week.  On the global economic calendar Japan and Canada CPI are the key releases, while durable goods orders data are released in the US.


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