New Zealand bonds close lower ahead of Q2 GDP next week

The New Zealand bonds closed on the downside on the last trading day of the week as investors wait to watch the country’s second-quarter gross domestic product (GDP), scheduled to be released on September 20 amid a silent trading session that lacked data of vital economic significance.

At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, jumped 7-1/2 basis points to 2.93 percent, the yield on 7-year note surged 6-1/2 basis points to 2.79 percent and the yield on short-term 2-year ended 3-1/2 basis points higher at 2.06 percent.

The latest REINZ housing report showed that the New Zealand housing market remains subdued. House sales fell by another 0.8 percent in August (adjusted for normal seasonal trends), leaving them down 22 percent over the past year. The level of sales is at the lowest level we’ve seen in three years.

House prices eked out a small gain, with the REINZ house price index rising by 0.4 percent for the month. House price growth has essentially stalled since the start of this year. Prices in Auckland nudged up 0.7 percent in August, but remain 3 percent below their recent peak. Price growth in other regions has also slowed, but more modestly.

Meanwhile, the NZX 50 index ended 0.72 percent lower at 7,762.66, while at 06:00GMT, the FxWirePro's Hourly NZD Strength Index remained highly bullish at 125.45 (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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