New Zealand bonds end higher on safe-haven demand following U.S. political nervousness; eyes on rbnz’s policy decision
Source: FxWire Pro - Commentary / 19 Mar 2018 01:55:59 Eastern Standard Time
New Zealand government bonds ended Monday’s session on a higher note as political tensions and disturbances continue to hover within the U.S. administration after President Donald Trump took to firing a number of officials in the last week on various charges.
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 2.87 percent, the yield on 20-year also plunged 3-1/2 basis points to 3.37 percent and the yield on short-term 2-year too closed 2-1/2 basis points lower at 1.91 percent.
On Sunday President Trump charged Andrew McCabe, the newly-fired former FBI deputy director, with creating 'fake memos' of their conversations, while suggesting James Comey, the fired former FBI director, with lying under oath.
Further, the Reserve Bank of New Zealand (RBNZ) is expected to again leave the Overnight Cash Rate (OCR) at 1.75 percent, and retain a cautiously upbeat stance at Grant Spencer’s last announcement as Acting Governor this week, according to a recent report from ANZ Research.
Developments since the February Statement won’t change the RBNZ’s assessment much, with the RBNZ not expecting to tighten monetary policy until the second half of 2019. OCR decisions have taken a bit of a back seat recently, with fiscal policy and potential changes to the PTA and Reserve Bank governance at the fore.
Meanwhile, the NZX 50 index closed 0.18 percent higher at 8,492.12, while at 05:00GMT, the FxWirePro's Hourly NZD Strength Index remained slightly bearish at -88.19 (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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