UST 10yr can't break higher. NZ bond yields nudge up. Eyes on US non-farm payrolls report but expectations aren't high

By Jason Wong

US 10-year Treasuries have been range bound around 2.72-2.75%.

In the immediate aftermath of the FOMC statement, the rate hit a fresh high of 2.75%.

There have since been a couple of attempts to break higher, but that has failed, so far.

Germany’s 10-year rate was up 2bps to a 2-year high of 0.72% and the UK 10-year reached a fresh high as well, up to 1.53%.

Global forces saw NZ 5-10 year bond yields from nudge up 2bps while rises across the swap curve were less than 1bp.

There are a few second-tier economic releases for NZ this morning but the main focus will be the US employment report tonight.  Indicators point to a strong nonfarm payrolls figure but the focus will be on the wages figure.  The timing of the survey is expected to impart some downside bias to the monthly change, while the annual increase is expected to tick up to 2.6% – no smoking gun to adjust monetary policy expectations if that’s the result.

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Jason Wong is on the BNZ Research team. All its research is available here.