• New Zealand bonds close higher on safe-haven demand as rising global uncertainties threaten risk sentiments

    Source: FxWire Pro - Commentary / 25 May 2018 02:57:49   America/New_York

    New Zealand bonds closed higher Friday as investors tilted towards safe-haven assets, following a rise in ongoing global uncertainties after United States President Donald Trump cancelled an upcoming summit with North Korean leader Kim-Jon-Un that sparked fears of a heightened disturbance in financial markets.

    At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, slumped 3 basis points to 2.77 percent, the yield on the long-term 20-year note slipped 1 basis point to 3.28 percent and the yield on short-term 2-year also closed 1 basis point lower at 1.87 percent.

    With the news that US president Trump has canceled the June 12 summit meeting with North Korean leader Kim, a risk-off tone prevailed over Asian bourses today. Wall Street closed lower, but the 10-year UST bond yield closed at 2.98 percent.

    In a nutshell, risk aversion persisted in the interim especially on uncertainty over China’s role in the US-DPRK negotiation (as suggested by Trump) amid the recent uptick in geopolitical tensions again. 

    Meanwhile, the NZX 50 index closed 0.55 percent higher at 8,638.40, while at 06:00GMT, the FxWirePro's Hourly NZD Strength Index remained neutral at 13.31 (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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