In the rates space, there isn’t much to report, other than global yields have nudged up a bit after recent falls.
Germany’s 10-year rate is up 2 bps to 0.27% while the US 10-year rate is up 3 bps to 2.18%, back to its 200-day moving average.
The rise in US rates might be just a case of exhaustion in the buying pressure on Treasuries or that the market sees tonight’s testimony to a Senate committee by former FBI Director Comey as less of a risk event, with a draft of his testimony already circulating.
Our view on US Treasuries is that they are still look a little over-bought, meaning a skewed bias towards the upside for yields on any positive news.
NZ rates were slightly lower across the curve yesterday, with the 2-year swap rate down 1 bp to 2.185% and the 10-year rate down 2.5 bps to 3.14%, both at fresh lows for the year.
This was some achievement in the face of upward pressure to Australian and US rates during the trading session and we’d expect some reversal of that move today at the long end.