New Zealand bonds close higher on short-covering; RBA June meeting minutes in focus

The New Zealand bonds ended on the upside Friday as investors remain sidelined in any major trading activity due to lack of any economically significant data and tracking some strength in the U.S. Treasuries. Also, markets will be focussing on the Reserve Bank of Australia’s (RBA) monetary policy meeting minutes for the month of June, scheduled for release next week.  

At the time of closing, the yield on the benchmark 10-year bond, which moves inversely to its price, slumped 3-1/2 basis points to 2.95 percent, the yield on 7-year note plunged 4 basis points to 2.82 percent while the yield on short-term 2-year note ended 1/2 basis point lower at 1.96 percent.

New Zealand’s net migration was pushed higher again in June, with a monthly net inflow of 6,350 people. This saw annual net migration rise to a fresh record high of 72,300 people. June’s rise in migration was driven by an increase in the number of overseas arrivals.

The main markets for new arrivals remain China, India and the UK. However, the composition of arrivals has been shifting. Over the past year the number of arrivals from China has increased only slightly, while the number of arrivals from India has fallen sharply (with much of this related to reduced inflows of international students). But at the same time, the number of arrivals from the UK and South Africa have lifted strongly.

Meanwhile, the New Zealand’s benchmark S&P/NZX 50 Index closed flat at  7,670.86 while at 05:00GMT, the FxWirePro's Hourly NZD Strength Index remained highly bullish at 151.80 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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