NZ Herald
  • Home
  • Latest news
  • Herald NOW
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
  • Herald NOW
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Politics
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Herald NOW
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Home / Business

NZ Government bond yields sink to record lows as global fears mount

Jamie Gray
By Jamie Gray
Business Reporter·NZ Herald·
26 Mar, 2019 03:28 AM3 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

10-year government bonds traded at their lowest point since the market was formed in 1985. Photo / File

10-year government bonds traded at their lowest point since the market was formed in 1985. Photo / File

New Zealand 10-year government bonds traded at their lowest point since the market was formed in 1985 as the world's central banks, spooked by worries about global growth, backtracked on their tightening plans.

The 10-year bond traded at a record low of 1.88 per cent, a far cry from its record high of 19.2 per cent in May 1985, and following the trend in the world's major credit markets.

Government bonds beyond two years maturity are at record lows and some are below the Reserve Bank's 1.75 per cent official cash rate - right out to the 2027 maturity (1.73 per cent).

"This is a globally-led decline in interest rates mainly from the United States and Europe because their central banks have reversed their stance on signalling a tightening of monetary conditions and backing off any tightening plans in view of the slowdown in global growth," Imre Speizer, senior market strategist at Westpac, said.

Bond yields have been trending downward since the 1980s as central banks around the world introduced inflation targeting in response to the runaway prices of the 1970s.

Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.

"Since 1985 we have been in a secular decline - the trend has been in one direction - in good part due to inflation being tamed from its 1970s peak," Speizer said.

Inflation targeting since then had made inflation more subdued and yields had fallen along with it.

The second part of the bond yields story came with the 2007-8 global financial crisis (GFC), which resulted in central banks loosening the reins on monetary policy to stave off a world-wide depression.

Advertisement
Advertise with NZME.

Since then, inflation has not bounced back to the levels that it was expected to, and yields have fallen further still.

"Yes, inflation is under control, but it has perhaps been too subdued in the last 10 years and the questions still remain unanswered as to why," Speizer said.

"The direction of interest rates remain, to this day, pointing downwards," he said.

Short dated securities were going nowhere while yields in longer dated paper were falling, reflecting heightened risk aversion, Speizer said.

Discover more

Business

How man tricked Facebook, Google into paying him $176m

25 Mar 11:52 PM
Construction

Mainzeal liquidators: Appeals will delay settlement for creditors

26 Mar 12:42 AM
Business

Abano expects annual net profit to fall

25 Mar 10:30 PM
Business

NZSA highly critical of NZX's performance

26 Mar 03:25 AM

Ultra-low bond yields have followed the US Federal Reserve's unexpectedly downbeat outlook last week which saw investors seeking the safe havens.

Bonds work inversely to yields - when bond prices go up, yields go down.

With economic data still weak and stalled, central banks have been forced to abandon moves to tighten monetary policy.

The yield on the benchmark 10-year US Treasury note fell on Monday to its lowest level since December 2017 as fixed-income investors continued to worry about global growth and a potential deceleration in the US economy.

Those fears kept the Treasury yield curve inverted during the session, with the yield on the 3-month bill above that of the 10-year note.

The short-term rate first exceed that of several longer-term securities last week in a phenomenon known as inversion and viewed by many as a recession predictor.

Advertisement
Advertise with NZME.

Other big fixed-income markets have also been affected since the Fed's commentary last week.

Yields on both the German 10-year bund, as well as the Japanese 10-year traded in negative territory this week.

New Zealand's Reserve Bank reviews its official cash rate tomorrow.

Economists expect the bank to keep the rate steady at 1.75 per cent, but opinion is divided as to what the bank's next move will be up or down.

Save

    Share this article

Latest from Business

Premium
Retail

Financial collapse: Beverage maker leaves $7m in unpaid debts

06 Jul 09:20 PM
Herald NOW

OCR announcement: Will the Reserve Bank hold or cut again?

Premium
Media Insider

NZME top executive resigns - to join rival media firm

06 Jul 08:35 PM

Audi offers a sporty spin on city driving with the A3 Sportback and S3 Sportback

sponsored
Advertisement
Advertise with NZME.

Latest from Business

Premium
Financial collapse: Beverage maker leaves $7m in unpaid debts

Financial collapse: Beverage maker leaves $7m in unpaid debts

06 Jul 09:20 PM

Liquidators recovered $370,646 from assets, but many creditors remain unpaid.

OCR announcement: Will the Reserve Bank hold or cut again?

OCR announcement: Will the Reserve Bank hold or cut again?

Premium
NZME top executive resigns - to join rival media firm

NZME top executive resigns - to join rival media firm

06 Jul 08:35 PM
Market Outlook with Forsyth Barr's Investment Strategist Zoe Wallis

Market Outlook with Forsyth Barr's Investment Strategist Zoe Wallis

Gold demand soars amid global turmoil
sponsored

Gold demand soars amid global turmoil

NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP