• New Zealand bonds close nearly flat in muted session head of rbnz’s monetary policy decision

    Source: FxWire Pro - Commentary / 24 Sep 2018 08:16:17   Europe/London

    The New Zealand bonds closed nearly flat at the start of the trading week Monday amid a muted trading session that witnessed data of little economic significance ahead of the Reserve Bank of New Zealand’s (RBNZ) monetary policy meeting, scheduled to be concluded on September 26 by 21:00GMT.

    At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, hovered around 2.685 percent, the yield on the long-term 20-year note slipped nearly 1/2 basis point to 3.000 percent and the yield on short-term 2-year closed nearly 1 basis point lower at 1.750 percent.

    The Reserve Bank of New Zealand (RBNZ) is expected to leave the OCR unchanged at next week’s OCR Review. However, there is still a one in three chance that the RBNZ cuts the OCR over the coming year, Westpac Research reported.

    A neutral Review would simply restate that the next move could be “up or down.”

    The other possibility is that the RBNZ adopts a “soft” easing bias, explicitly warning that if the economy fails to accelerate as expected, the OCR could fall. This would match RBNZ comments made in the media, and would be in the spirit of open and frank communication that the RBNZ has embraced, the report added.

    Meanwhile, the NZX 50 index closed 0.41 percent lower at 9,337.51, while at 06:00GMT, the FxWirePro's Hourly NZD Strength Index remained neutral at 111.60 (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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