New Zealand bonds fall at close in muted trading session ahead of China’s Q3 GDP data

The New Zealand bonds closed lower Thursday amid a muted trading session that witnessed data of little economic significance as investors remain keen to watch China’s gross domestic product for the third quarter of this year, scheduled to be released on October 19 by 02:00GMT.

At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, rose nearly 1 basis point to 2.718 percent, the yield on the long-term 20-year note remained tad higher at 3.025 percent and the yield on short-term 2-year closed flat at 1.855 percent.

According to a report from Moneycontrol, citing source from Reuters, a poll of 68 economists showed that China’s gross domestic product likely grew 6.6 percent in July-September from a year earlier, slowing from the previous quarter's 6.7 percent and hitting the weakest pace since the first quarter of 2009.

However, the predicted third-quarter growth would still be higher than the government's full-year target of around 6.5 percent.

Lastly, the Federal Open Market Committee’s (FOMC) monetary policy meeting minutes, released late yesterday, highlighted that “participants generally anticipated that further gradual increases in the target range for the federal funds rate would most likely be consistent with a sustained economic expansion, strong labor market conditions and inflation near 2 percent over the medium term” and “a substantial majority of participants expected that the year-end 2020 and 2021 federal funds rate would be above their estimates of the longer-run rate”, OCBC Bank reported in its latest Daily Treasury Outlook.

Meanwhile, the NZX 50 index closed 0.013 percent lower at 8,910.59, while at 05:00GMT, the FxWirePro's Hourly NZD Strength Index remained highly bullish at 138.14 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex