New Zealand bonds jump at close tracking U.S. cousin on solid rise in safe-haven demand post hawkish FOMC May meeting minutes

New Zealand bonds jumped at the time of closing, tracking similar movement in the U.S. counterpart, as investors flocked into safe-haven instruments after the release of the Federal Reserve’s May monetary policy meeting minutes.

At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, slumped 4-1/2 basis points to 2.79 percent, the yield on the long-term 20-year note plunged 5-1/2 basis points to 3.31 percent and the yield on short-term 2-year closed flat at 1.87 percent.

U.S. Treasury yields held at lower levels on Wednesday after minutes of the Federal Reserve’s May meeting showed that most Fed policymakers thought it likely another interest rate increase would be warranted “soon” if the U.S. economic outlook remains intact.

The minutes also included a call by some policymakers to revise the Fed’s monetary policy statement soon to reflect that rates would be close or above long-run estimates before too long.

Meanwhile, the NZX 50 index closed 0.44 percent higher at 8,590.77, while at 06:00GMT, the FxWirePro's Hourly NZD Strength Index remained highly bullish at -19.85 (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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