New Zealand bonds gain at close ahead of RBNZ Governor Wheeler’s speech

The New Zealand bonds gained Tuesday as investors wait to watch the Reserve Bank of New Zealand (RBNZ) Governor Graeme Wheeler’s speech, scheduled to be held on May 31 amid a muted trading session.

At the time of closing, the yield on the benchmark 10-year bond, which moves inversely to its price, fell 1 basis point to 2.84 percent, the yield on 7-year note also slipped 1 basis point to 2.72 percent and the yield on the short-term 2-year note too ended 1 basis point lower at 1.96 percent.

The country’s residential consent issuance took a step down in April, declining by 7.6 percent over the month. That follows a 1.2 percent decline last month. But this result needs to be put in perspective. Some of the softness in April looks like it is due to the timing of Easter, with public holidays meaning less time for the processing of consents.

In New Zealand’s latest 2017 Budget, unveiled by the country’s MoF, the Government has introduced a Family Incomes Package to support those on lower and middle incomes. This includes an adjustment to tax thresholds, an increase in Working for Families, as well as increases in accommodation support. Spending is being increased in a range of areas, including public and social services, as well as much needed infrastructure investment.

Meanwhile, the New Zealand’s benchmark S&P/NZX 50 Index closed flat at 7,411.95 while at 05:00GMT, the FxWirePro's Hourly NZD Strength Index remained neutral at 74.07 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex