New Zealand bonds slump ahead of GDT price auction amid muted trading session

The New Zealand bonds slumped Tuesday as investors wait to watch the country’s GlobalDairyTrade price auction, scheduled to be held later today amid a silent trading week that will witness little data of major economic significance.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 1-1/2 basis points to 2.87 percent, the yield on 7-year note also climbed 1-1/2 basis points to 2.87 percent and the yield on short-term 2-year traded 1 basis point higher at 2.03 percent by 04:00GMT.

New Zealand’s ANZ Commodity Price Index slipped 0.8 percent m/m in August, matching the fall in July (+16.3 percent y/y). Movements at the sub-category level were mixed. Six of the sub-components rose, eight fell and the remaining three were unchanged. The dip in the NZD against most major peers during August helped buffer local returns (+0.2 percent m/m), with the NZD index also 16 percent higher than 12 months prior.

Further, the country’s construction activity was weaker than expected in the June quarter, falling by 0.5 percent, vs expectations for a 4 percent rise. This follows a 3.3 percent fall in the March quarter. The level of construction activity was 1.3 percent lower than it was this time last year.

Meanwhile, the NZX 50 index traded 0.38 percent lower at 7,778.52 by 04:05GMT, while at 04:00GMT, the FxWirePro's Hourly NZD Strength Index remained slightly bearish at -75.22 (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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