New Zealand bonds close mixed as investors await Q1 GDP in elsewise silent week

The New Zealand bonds ended on a mixed tone Monday in a silent trading session that witnessed no data of economic significance. Also, investors are eyeing the country’s first-quarter gross domestic product (GDP), scheduled to be released on June 15.

However, the ongoing distress surrounding the notion of a hung Parliament in the UK, after Prime Minister Theresa May failed to secure a winning majority in the June 8 snap election has added further sluggishness to the country’s debt market.

At the time of closing, the yield on the benchmark 10-year bond, which moves inversely to its price, jumped 2 basis points to 2.80 percent, the yield on 7-year note slipped 1 basis point to 2.69 percent while the yield on short-term 2-year note ended 1 basis point higher at 1.96 percent.

The country’s GDP is expected to show a more ‘normal’ pace of growth over the March quarter, as some of the temporary factors that held back growth in the December quarter unwind.

"We’re forecasting a 0.8 percent increase in GDP, a little less than the 0.9 percent rise that the Reserve Bank expected in its most recent Monetary Policy Statement, but at the higher end of market forecasts. Meanwhile, the current account deficit is expected to widen as weak export volumes outweigh higher prices," Westpac commented in its latest research report.

Meanwhile, the New Zealand’s benchmark S&P/NZX 50 Index closed flat at 7,432.74 while at 06:00GMT, the FxWirePro's Hourly NZD Strength Index remained highly bullish at 138.66 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex