Forex Flash: Expect global demand for NZ gvt bonds to remain robust - Bank of New Zealand

FXstreet.com (Barcelona) - As long as a global 'low yield' environment lingers, foreign demand for NZ Government bonds will likely remain solid, says Bank of New Zealand analysts. "The US Fed's, by stating policy of keeping exceptionally low levels for the Federal funds rate at least through late 2014, helps underpin this relatively 'low yield' backdrop."

Bank of New Zealand adds: "NZ government bonds maintain a decent yield premium to offshore alternatives and a stable AA+ (S&P's local currency, long-term) rating. In this context we see global demand for government bonds remaining robust, if not rising. As shown by this week's non-resident bond holdings data, foreign ownership of NZ government bonds is ticking up (now 63%)."