New Zealand bonds close tad higher amid mild trading activity

The New Zealand bonds closed tad higher Monday, slightly racing the U.S. counterparts amid a session that witnessed data of little economic significance.

The yield on the benchmark 10-year bond, which moves inversely to its price fell 1 basis point to 3.19 percent, the yield on 7-year note also slid nearly 1 basis point to 2.80 percent while the yield on short-term 2-year note closed flat at 2.13 percent.

New Zealand’s goods trade data released last week, showed that the country recorded NZD18 million deficit in February, weaker than expected. February is typically a strong month for export volumes (due to high meat and dairy volumes), meaning the seasonally adjusted deficit was much larger at NZD411 million. The annual trade deficit also deteriorated sharply to NZD3.8 billion as a large one-off export from February 2016 dropped out of the annual calculation.

Seasonally adjusted exports fell by 2.8 percent in February, more than unwinding January’s 0.9 percent rise. While higher dairy export prices are bolstering export receipts, lower milk production is weighing on export volumes and dampening the overall impulse. Dairy export receipts tracked sideways in February but were still up 5.6 percent on a year earlier.

Meanwhile, the New Zealand’s benchmark S&P/NZX 50 Index closed 0.16 percent lower at 7,062.71, while at 05:00 GMT, the FxWirePro's Hourly NZD Strength Index remained slightly bearish at -88.21 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex