New Zealand bonds jump at close after reading upbeat producer prices in Q2

The New Zealand bonds jumped at the time of closing Thursday after the country’s producer price index for the second-quarter of this year registered higher figures than the previous readings in the Q1.

At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, slumped 3-1/2 basis points to 2.88 percent, the yield on 7-year note plunged 3 basis points to 2.73 percent and the yield on short-term 2-year ended 2-1/2 basis points lower at 2.04 percent.

New Zealand’s output producers price index, which shows the prices producers receive for their goods and services, rose 1.3 percent in the June quarter, a smaller increase than the 1.4 percent increase in the inputs PPI, which shows how much they pay to produce things, Statistics New Zealand said.

The outputs measure was led higher by an 8.8 percent gain in prices received by sheep, beef cattle and grain farmers and a 6.9 percent increase in meat and meat product manufacturing prices. However, the price producers paid for electricity and gas supply rose 8.5 percent, seeing an overall narrowing of margins in the quarter.

Prices in the latest Global Dairy Trade (GDT) auction, the 4th sale of the 2017-18 season, fell 0.4 percent following a 1.6 percent decline at the previous sale. Whole Milk Powder prices fell 0.6 percent, following a 1.3 percent gain previously, although Skim Milk Powder prices rose 0.3 percent. There was a further small correction in butter prices which fell 1.3 percent.

Meanwhile, the NZX 50 index rose 0.21 percent at close to 7,870.06, while at 06:00GMT, the FxWirePro's Hourly NZD Strength Index remained neutral at 4.23 (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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