New Zealand two-year bond yields jump to fortnight high on upbeat jobs report

Yields on the two-year New Zealand (NZ) government bond rose 2.5 basis points (bps), or 3.36%, to 0.77% after strong NZ Q2 employment figures, published during the early Asian session on Wednesday.

Among the key details, the headline NZ Employment Change crossed 0.7% market consensus and 0.6% prior to 1.0% whereas the Unemployment Rate dropped to a one-year low of 4.0% versus 4.5% forecast and 4.7% previous readouts.

Read: NZD/USD: Bulls attack 0.7050 on strong NZ Q2 Employment data

The data propelled bets for the Reserve Bank of New Zealand (RBNZ) rate hike during 2021, also favored the NZD/USD bulls to refresh weekly top around 0.7050 before recently easing to 0.7038.

It’s worth noting that multiple research houses including the Australia and New Zealand Banking Group (ANZ), Westpac and the Bank of New Zealand (BNZ), raised their RBNZ rate hike forecasts following the data release. The banks now expect benchmark rates to go up from August, which in turn suggests further upside for the NZD/USD prices.