New Zealand bonds end higher in muted trading ahead of next week’s RBNZ monetary policy meeting

New Zealand bonds ended on a higher note Friday, tracking similar movement in the U.S. Treasuries in the overnight session amid a muted trading session that witnessed data of little economic significance. Investors will now remain focused on the Reserve Bank of New Zealand’s (RBNZ) monetary policy decision, scheduled for mid-next week for further direction in the debt market.

At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, slumped 2-1/2 basis points to 2.80 percent, the yield on the long-term 20-year note plunged 3 basis points to 3.35 percent and the yield on short-term 2-year closed nearly flat at 1.92 percent.

Global risk appetite may remain sidelined today, notwithstanding "fairly positive" US-China trade talks that have kicked off, as investors await the key US nonfarm payrolls, unemployment rate and average hourly earnings (with consensus eyeing 192k, 4.0 percent and 2.7 percent y/y respectively for April, versus 103k, 4.1 percent and 2.7 percent y/y in Mar.

The massive sell-off in Argentina (prompting the central bank to hike its interest rates for a second time in a week to 33.25 percent) and the record low Turkish lira also reminded that not all is well with EM markets in Latam. While the S&P500 pared losses but still chalked up its second session of declines after testing its 200-day moving average and the 10-year UST bond yield touched an intra-day low of 2.93 percent.

Meanwhile, the NZX 50 index closed 0.029 percent higher at 8,549.37, while at 06:00GMT, the FxWirePro's Hourly NZD Strength Index remained neutral at -2.38 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest