New Zealand bonds jump at close after dairy prices fall at latest GDT auction

The New Zealand bonds jumped at the time of closing Wednesday after dairy prices fell at the country’s latest Global Dairy Trade (GDT) price auction.

At the time of closing, the yield on the benchmark 10-year bond, which moves inversely to its price, slumped 3 basis points to 3.03 percent, the yield on 7-year note plunged 4-1/2 basis points to 2.85 percent and the yield on short-term 2-year note ended 1-1/2 basis points lower at 2.11 percent.

Prices at the latest GDT auction, the 3rd sale of the 2017-18 season, fell 1.6 percent, following a 0.2 percent increase at the previous sale. Prices overall have dipped below highs seen in December 2016 and prices which will cause some concerns that underlying momentum is fading with prices drifting from second-quarter levels.

In contrast, the country’s unemployment rate fell to 4.8 percent in the June quarter, down from 4.9 percent in March. This is the lowest level of unemployment since December 2008. However, Labour market participation unexpectedly fell to 70.0 percent. Wage inflation remained muted, as expected.

Meanwhile, the New Zealand’s benchmark S&P/NZX 50 Index ended 0.24 percent higher at  7,748.31 while at 05:00GMT, the FxWirePro's Hourly NZD Strength Index remained slightly bearish at -96.23 (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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