New Zealand bonds close higher on Prime Minister John Key’s surprise resignation, Italy rejects constitutional reform

The New Zealand government bonds closed higher Monday after Prime Minister John Key unexpectedly announced his resignation after being eight years in power.

Also, investors moved towards safe-haven buying after the Italians voted against a constitutional reform during Sunday’s referendum, resulting in the resignation of Prime Minister Matteo Renzi.

The yield on the benchmark 10-year bond, which moves inversely to its price, closed 5 basis points lower at 3.23 percent, the yield on 7-year note also ended nearly 4 basis points lower to 2.82 percent and the yield on short-term 2-year note slid 3-1/2 basis points to 2.18 percent.

New Zealand’s Prime Minister John Key surprisingly announced his resignation today after 8 years of service ahead of next general election, which is scheduled to be held in late 2017. Finance Minister Bill English is mostly expected to take over after Key’s formal resignation on next Monday.

Moreover, Italian Prime Minister Matteo Renzi has resigned after suffering a heavy defeat in a referendum over his plan to reform the constitution. In a late-night news conference, he said he took responsibility for the outcome and said the No camp must now make clear proposals, reported BBC news.

With most ballots counted, the No vote leads with 60 percent against 40 percent for Yes. The turnout was nearly 70 percent, in a vote that was seen as a chance to register discontent with the prime minister, they added.

Meanwhile, the New Zealand’s benchmark S&P/NZX50 Index closed down 50.14 points to 6,854.71.