New Zealand bonds end higher following disappointing trade balance data, firm U.S. Treasuries

New Zealand government bonds ended the last trading day of the week Friday on a higher note, following influx of risk averse sentiments after the country’s trade balance data for the month of March disappointed market sentiments , in addition to strength in the United States counterpart.

The yield on New Zealand’s benchmark 10-year Treasury note, which moves inversely to its price, slumped 5 basis points to 2.90 percent, the yield on the long-term 20-year note also plunged 5 basis points to 3.47 percent and the yield on short-term 2-year closed 2-1/2 basis points lower at 1.92 percent.

The March trade deficit of -NZD86 million was the largest since 2008 and well below expectations of a NZD275 million surplus. There was a large uplift in petrol/oil products, which was due to the recent lift in prices and a period of lower imported volumes. There was some rebound in vehicle imports, albeit that the increase hasn’t fully offset the February drop yet.

Export performance remained fairly steady lead by dairy, forestry, aluminium and wine. There was some softness in meat, fruit and seafood though. By country, export growth to China has slowed after a tremendous run. However, there is still strong growth from other Asian markets and intra-competition with some European countries.

Meanwhile, the NZX 50 index jumped 1.07 percent to 8,370.37 at the time of closing, while at 05:00GMT, the FxWirePro's Hourly NZD Strength Index remained neutral at -28.29 (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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