Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
The New Zealand government bonds closed flat Friday as investors remain reluctant to trade amid a soft session that witnessed data of least economic significance. Also, investors remain focused on the GlobalDairyTrade price auction scheduled to be held on February 7, besides the Reserve Bank of New Zealand’s (RBNZ) first monetary policy decision of 2017 on February 9.
The yield on the benchmark 10-year bond, which moves inversely to its price, hovered around 3.40 percent at the time of closing, the yield on 7-year note also traded flat at 3.03 percent and the yield on short-term 2-year note ended 1/2 basis point lower at 2.31 percent.
Dairy prices were broadly stable in last month’s GDT auction. In aggregate, prices rose by 0.6 percent, following previous auction’s 3.5 percent fall. After a 7.7 percent fall December auction, whole milk powder prices were stable, edging 0.1 percent lower to USD3,283/tonne.
Further, buyer interest out of China looks to have improved over the past couple of auctions, after falling away a bit through December. We at FxWirepro continue to foresee slight moderation in dairy prices in the near term
Also, The RBNZ is widely expected to maintain the official cash rate (OCR) at a historic low of 1.75 percent amid stronger than expected lift in inflation was more broad-based than widely anticipated.
"We expect the Reserve Bank to hold the OCR at 1.75 percent, with a firmly neutral outlook. The RBNZ will take some comfort from the fact that inflation is finally back within the target range. But there are still some significant barriers to a further pickup in inflation from here," said Michael Gordon in Westpac NZ Research note.
Meanwhile, the New Zealand’s benchmark S&P/NZX 50 Index closed 0.58 percent higher at 7,094.38, while at 5:00 GMT, the FxWirePro's Hourly NZD Strength Index remained highly bearish at -109.61 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex
