Fed voices for earlier rate hikes grow louder; Greeks reported to be looking for compromise

By Kymberly Martin

It was a very quiet day for NZ swaps and bonds with both closing little changed.

Overnight, US 10-year yields pushed higher.

In the absence of domestic data releases yesterday there was little to provide the NZ market with direction.

Consequently, there was not much action except a brief push higher in yields on the back of some hawkish comments from Fed member Fisher.

He said the Fed “went too far” with its stimulus efforts and he would prefer a March hike. However, as a known hawk and non-voter the damage was limited.

NZ 2 and 10-year swap closed at 3.62% and 3.75% respectively.

Overnight, US 10-year yields continued their drift higher despite a renewed slump in the global oil price (WTI currently down 3.5%). From 1.96%, yields pushed above 2.01% before returning to trade at 1.99% currently.

There is a band of support for 10-year Treasuries when yields approach 2.03%. This could curtail upward momentum in yields in the near-term.

Greek 10-year yields declined from 10.6% to 10.2% overnight.

The Greek finance minister appears to be looking for compromise, saying that Greece will implement about 70% of the reforms already included in current bailout conditions.

Today looks to be another fairly subdued day on the domestic front. Only credit card retail spending data (January) are due.