BNY’s Geoff Yu highlights that foreign holdings of New Zealand government bonds rose to 58.9% in July 2026, while NZD/USD trades slightly above its 12‑month average. Despite robust domestic activity, Yu doubts current market pricing that implies two more RBNZ hikes by year-end, arguing well-anchored inflation expectations and stable nontradables inflation soften the case for further tightening.
Foreign demand vs. rate expectations
“New Zealand’s central bank data show foreign investors held 58.9% of government bonds in July 2026, up from 57.7% in June. Nonresident holdings rose to NZ$122.47bn from NZ$115.53bn, while non-resident repo holdings…
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