Bond Traders’ Steepener Bets Boosted by RBNZ’s Dovish Surprise

Global bond funds making so-called steepening trades just got a helping hand from the Reserve Bank of New Zealand.

The RBNZ followed an unsurprising interest rate cut Wednesday with a surprisingly dovish statement, sending the country’s two-year yields down 16 basis points as traders readjusted their rate expectations. That was good news for investors betting on curve steepening, a popular strategy that profits when the gap between long-term and short-term bond yields increases. New Zealand’s 30-year yields fell by around seven basis points.