New Zealand bonds rally at close in silent trading session

The New Zealand rallied at close in a silent trading session that witnessed no significant data. Also, the country’s dairy prices eased at the latest GlobalDairyTrade (GDT) price auction, held earlier today. However, prices rose for the sixth consecutive time, albeit at a moderate pace.

At the time of closing, the yield on the benchmark 10-year bond, which moves inversely to its price, fell 1 basis point to 2.75 percent, the yield on 7-year note also slipped nearly 1 basis point to 2.65 percent and the yield on short-term 2-year note ended 1/2 basis point lower at 1.95 percent.

Prices in the latest Global Dairy Trade (GDT) auction, the 11th sale of calendar 2017, rose 0.6 percent following a 3.2 percent gain previously. This was the 6th successive gain with prices rising close to 15 percent in the past two months.

Prices have held above the December 2016 highs in the latest auction which will boost underlying confidence with overall prices close to 3-year highs. The gains across products will help offset some disappointment surrounding the decline in Whole Milk Powder prices.

Fonterra lifted the forecast milk price for 2016/17 to USD6.15 per kg/ms and also forecast an opening price for USD6.50 for 2017/18.

Meanwhile, the New Zealand’s benchmark S&P/NZX 50 Index closed 0.12 percent lower at 7,458.66 while at 05:00GMT, the FxWirePro's Hourly NZD Strength Index remained highly bullish at 122.07 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex