The yield on New Zealand’s 10-year government bond has jumped to 3.5-month highs in the NZD-positive manner.
The yield is currently trading at 0.86%, the highest level since July 26, representing a 10 basis point gain on the day. Further, the benchmark yield is up 36 basis points this week.
The long bond yield is rising on increased hopes for coronavirus vaccine and the Reserve Bank of New Zealand’s upbeat take on the economy.
Early Wednesday, the central bank said that both the domestic and global economy has been more resilient than previously expected and there is less urgency to reduce rates to sub-zero levels. The RBNZ’s optimistic tone forced the money markets to price out prospects of interest rates falling below zero next year.
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