Opinion: Why local swap rates will rise quickly at the long end

By Roger J Kerr

Stronger US economic data over coming months looks set to push US 10 year Treasury bond yields up through the resistance line at 3.5%.

A decisive break upwards should see a return to 4.0% relatively quickly.

Consequently, NZ 10-year swap interest rates are forecast to increase from the current 5.4% level to above 6.0%.

The three to ten year term swaps rates will also be dragged upwards accordingly.

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 * Roger J Kerr runs Asia Pacific Risk Management. He specialises in fixed interest securities and is a commentator on economics and markets. More commentary and useful information on fixed interest investing can be found at rogeradvice.com