New Zealand 10-Year Yield Edges Lower

New Zealand’s 10-year government bond yield fell by 3 bps to 4.65% on Thursday, hovering near a four-month low reached on November 10, amid strong demand for government bonds following preliminary election results that reduced concerns over the country's fiscal outlook. The sale of April 2037 bonds attracted bids worth 7.46 times the amount offered, the highest bid-to-cover ratio for any tenor since February 2013. This followed preliminary election results showing that the incumbent National Party had secured enough electorate seats to keep its three-party bloc marginally ahead. The prospect of the conservative government retaining power eased concerns about a potential widening of the budget deficit under a change in administration. Further supporting bond prices was the reduction in weekly auction sizes to NZ$350 million this month from NZ$450 million in October, alongside increased demand from large coupon payments.