NZ rates rose in sympathy with offshore bonds yesterday.
Overnight, US Treasury yields slipped lower after a poor risk tone emerged from Asian and US equities, and as oil prices dribble back below $45.
Local rates markets shrugged off the consolidation in dairy prices on Tuesday night, and instead took their cues from the modest sell-off in global bonds.
NZ rates pushed higher across the curve, with the 2-10s curve steepening by 2 bps to 80 bps. That is still in the bottom half of the 60-120 bps range we expect to prevail over the coming months.
US bond yields pushed lower, driven by lower oil prices and declines in Asian and US stocks. WTI crude fell back below $45bb for the first time since early October after US oil inventories grew at more than double the pace anticipated. The 10-year bond yield dipped back below 2.00% briefly this morning.
The events calendar picks up the pace slightly this evening, with our eyes mostly on the ECB. No policy change is expected, and if anything, the market may be disappointed if ECB President Draghi fails to talk stridently about easing policy further.
---------------------------
Raiko Shareef is on the BNZ Research team. All its research is available here.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.