New Zealand bonds close mixed ahead of GDT price auction, Q1 producer price index data

New Zealand bonds closed Tuesday’s session on a mixed note as investors remain keen to watch the country’s GlobaldairyTrade (GDT) price auction and the producer price index (PPI) data for the first quarter of this year, scheduled for release today and on May 16 respectively.

At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, slipped 1 basis point to 2.76 percent, the yield on the long-term 20-year note jumped 2 basis points to 3.26 percent and the yield on short-term 2-year closed 1 basis point lower at 1.86 percent.

At the latest GDT price auction held a fortnight before, global dairy prices have dipped 1.1 percent in to reach an average price of USD3465 (NZD4,951) per tonne. The benchmark whole milk powder prices dropped 1.5 percent, skim milk powder (SMP) lifted 3.6 percent, rennet casein was down 10.5 percent, cheddar prices were up 3.1 percent and butter remained unchanged.

Global risk appetite remained hesitant on a light economic data calendar yesterday, with Wall Street little changed while the 10-year UST bond yield topped 3 percent as Fed’s Mester sounded more hawkish in suggesting that the Fed could have to raise interest rates above 3 percent.

Meanwhile, the NZX 50 index closed 0.051 percent lower at 8,708.78, while at 06:00GMT, the FxWirePro's Hourly NZD Strength Index remained slightly bearish at -99.49 (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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