Matthew Burgess

For all the hand-wringing over war-related inflation fears, there are signs that other drivers are having as much a bearing on longer-term borrowing costs.

Bond strategists warn yields to stay high even if Iran war ends

Hedge funds are betting that a weak economic backdrop will force the Reserve Bank of New Zealand to undershoot expectations of five quarter point rate increases priced in the swaps market.

Oil and the dollar fell while US stock futures climbed as risk appetite improved on hopes that a deal to reopen the Strait of Hormuz and restore crude flows could be close.

Brent dropped more than 5% to about $98 a barrel as the US and Iran appeared to close in on a deal. The dollar weakened against all its Group-of-10 peers and gold jumped.

New Zealand will introduce a charge on firms active in the nation’s finance sector to cover the cost of their supervision by the Reserve Bank.

Oil climbed as tensions remained elevated in the Middle East, with negotiations over a permanent US-Iran ceasefire showing little sign of a breakthrough.

The Australian dollar may have further scope to fall against the kiwi as traders unwind bearish positions in New Zealand’s currency following a hawkish shift from the nation’s central bank, analysts said.

Australia’s longer-term inflation expectations have edged higher, with financial markets now anticipating consumer prices will remain above the Reserve Bank’s target for an extended period — a shift not seen in years, according to RBA board member Ian Harper.

A gauge of demand for Australian government bonds due in seven years surged at auction Wednesday as investors increasingly bet the Reserve Bank’s tightening cycle is nearing an end.