Bond yields globally are also being suppressed
The fall below 2% for the first time in New Zealand's 10-year bond yields isn't just an isolated incident in markets this week. The fact that Treasury yields are being driven lower after the FOMC meeting on Wednesday is also causing a more pronounced effect in the bond market as yields everywhere are starting to suffer:
- Australia's 10-year bond yields are just 2 bps of all-time lows of 1.81%
- Japan's 10-year bond yields fall deeper into negative territory, lowest since late 2016
- Germany's 10-year bond yields inch closer towards 0%
So, if you're looking for an argument for a weaker dollar after the Fed, just be wary that other major economies aren't faring that much better. The fact that 10-year Treasury yields still pay well over 2% should be a reason for investors to not be too worried about prolonged dollar weakness in the bigger picture.
