New Zealand's Bonds Surge Amid Global Debt Rally Fueled by Treasuries

New Zealand’s biggest bond rally in a year set the tone for moves across other debt markets Wednesday following declines in U.S. Treasury yields, Bloomberg News reported. Kiwi yields posted their biggest drop since the coronavirus wreaked havoc in March last year as traders curbed wagers for interest-rate hikes in the wake of government measures to cool housing prices. Bonds in Australia and emerging Asian economies also advanced while German bund futures signaled a firmer start. Gains in Treasuries provided the cornerstone for broader moves as the Federal Reserve continued to emphasize its intention to keep monetary policy loose for longer. Renewed Covid-19 lockdowns in France and Germany cast a shadow over Europe’s recovery and reinforced the risks confronting the global economy. “One of the key reasons why bonds were so strong overnight is fears that the re-openings of economies might not be as fast as investors might have previously thought,” said John Vail, chief global strategist at at Nikko Asset Management Co. in Tokyo. He also pointed to end-of-quarter portfolio re-balancing by investors buying back into bonds after the selloff seen in recent months. Read more.
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