New Zealand's 2-year government bond yield continues to decline further due to weak GDP boosting bets on the central bank cutting interest rates.

Due to weak economic growth data in the second quarter, speculation about the Reserve Bank of New Zealand significantly cutting interest rates at the October meeting has intensified, causing the 2-year New Zealand government bond yield, sensitive to interest rate policy, to further decline. The 2-year bond yield dropped by 10 basis points to 2.81%; the New Zealand dollar/US dollar also fell by 0.7% to 0.5926. Data shows that market participants are factoring in a 32 basis point rate cut at the October meeting, more than the 26 basis points before the release of the GDP data.