New Zealand bonds fall at close after global dairy prices remain unchanged; attention turns to RBNZ’s monetary policy meeting

New Zealand bonds closed lower Wednesday after global dairy prices remained unchanged at the latest GlobalDairyTrade (GDT) price auction, held early today ahead of the Reserve Bank of New Zealand’s (RBNZ) monetary policy meeting, which will most likely be non-eventful, scheduled to be held today by 21:00GMT, followed by a press conference at 22:00GMT.

At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, rose 1 basis point to 2.78 percent, the yield on the long-term 20-year note hovered around 3.09 percent and the yield on short-term 2-year closed 1 basis point higher at 1.81 percent.

Whole milk powder price rose 0.1 percent to USD2958/MT; skim milk powder price index lifted 0.3 percent to USD1972/MT.

Wall Street climbed amid strong corporate earnings and upbeat economic data. The U.S. dollar pared declines as the United States Treasury bond yield rose following USD34 billion of new 3-year supply that met with soft demand. The UST yield curve also steepened ahead of 10- and 30-year sales, with the 10-year bond yield at 2.97 percent.

The RBNZ will probably repeat that it expects to keep the Overnight Cash Rate (OCR) at its current low level for a long while. The OCR forecast will likely be unchanged, or perhaps could be shifted a tiny smidgen lower, Westpac Research reported.

Meanwhile, the NZX 50 index closed 0.041 percent lower at 8,872.09, while at 07:00GMT, the FxWirePro's Hourly NZD Strength Index remained neutral at 56.18 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex