New Zealand bonds close mixed ahead of FOMC's policy decision; 10-year yield hovers near 3-month high

New Zealand bonds remained mixed at the time of closing Monday as investors wait to watch the Federal Open Market Committee’s (FOMC) monetary policy decision, scheduled to be unveiled on June 13 at 18:00GMT, followed by the press conference.

At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, slid 1/2 basis point to 3.01 percent, the yield on the long-term rose 1/2 basis point to 3.33 percent and the yield on short-term 2-year closed 1 basis point lower at 1.91 percent.

Market sentiment continued to consolidate ahead of this week’s key events including Tuesday’s Trump-Kim summit as well as three major central banks’ meetings including FOMC, ECB and BoJ.

The G7 meeting over the weekend did not bode well for risk sentiment as President Trump walked away without endorsing the G7 statement as he criticized Canadian Prime Minister Trudeau and called him "dishonest and weak".

For central banks, it is almost a done deal for the Fed to hike its interest rate for the second time this year. However, the key focus will be the dot charts as well as the terminal rate, where the market will assess whether the Fed rate hike will be three or four times. 

Meanwhile, the NZX 50 index closed 0.24 percent higher at 8,959.81, while at 05:00GMT, the FxWirePro's Hourly NZD Strength Index remained slightly bullish at 76.67 (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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