1.Suggest (and explain) a possible reason that the yield curve in November 2019 slopes the way it does (think about what was happening in the world around that time, just before the COVID-19 Pandemic).
Ans :
Secondary market government bond yields Secondary market government bond yields Secondary market government bond yields Secondary market government bond yields 1 Bank bill yields Bank bill yields Bank bill yields Cash rate Official Cash Rate (OCR) Cash rate Overnight interbank cash rate 30 days 60 days 90 days 2 year 5 year 10 year %pa INM.MP1.N.nae %pa INM.MB01.N %pa INM.MBO2.N 1.11 %pa INM.MBO.N 1 year Yes %pa INM.MG101.N 0.78 %pa INM.MG102.N 0.78 0.89 %pa INM.MG110.N 1.16 1.16 1.17 %pa INM.MG105.N 0.89 1.09 1.27 1.21 1.18 1.05 1.18 1.23 47 0.97 1.18 1.07 1.35 1.53 1.48 O 1.07 2 3 Notes 4. Unit 5 Series Id -23 Oct 2019 -24 Nov 2019 -25 Dec 2019 -26 Jan 2020 -27 Feb 2020 -28 Mar 2020 -29 Apr 2020 -30 May 2020 -31 Jun 2020 -32 Jul 2020 -33 Aug 2020 -34 Sep 2020 -35 Oct 2020 -36 Nov 2020 -37 Dec 2020 1.00 1.00 1.00 1.00 1.00 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 %pa INM.MN.NZK 0.97 0.99 0.95 0.92 0.93 0.56 0.26 0.25 0.23 0.21 0.15 0.26 0.21 0.22 0.23 9.00 8.00 1.20 1.13 0.68 0.31 0.26 0.27 0.27 0.27 0.28 0.27 0.27 0.26 1.20 1.23 1.16 0.69 0.35 0.26 0.27 0.29 0.28 0.29 0.27 0.27 0.26 7.00 6.00 5.00 0.77 0.53 0.24 0.43 0.42 0.25 0.02 0.03 0.21 0.34 1.28 1.08 0.95 0.64 0.90 0.91 0.68 0.56 0.54 0.75 0.92 4.00 b 3.00 2.00 1.00 0.00 0 1 2 3 4 5 6 7 8 9 -38 -39 40 Aug-08 Dec-10 Nov-19 (Aug-08) ........ (Dec-10) .......(Nov-19) Secondary market government bond yields Secondary market government bond yields Secondary market government bond yields Secondary market government bond yields 1 Bank bill yields Bank bill yields Bank bill yields Cash rate Official Cash Rate (OCR) Cash rate Overnight interbank cash rate 30 days 60 days 90 days 2 year 5 year 10 year %pa INM.MP1.N.nae %pa INM.MB01.N %pa INM.MBO2.N 1.11 %pa INM.MBO.N 1 year Yes %pa INM.MG101.N 0.78 %pa INM.MG102.N 0.78 0.89 %pa INM.MG110.N 1.16 1.16 1.17 %pa INM.MG105.N 0.89 1.09 1.27 1.21 1.18 1.05 1.18 1.23 47 0.97 1.18 1.07 1.35 1.53 1.48 O 1.07 2 3 Notes 4. Unit 5 Series Id -23 Oct 2019 -24 Nov 2019 -25 Dec 2019 -26 Jan 2020 -27 Feb 2020 -28 Mar 2020 -29 Apr 2020 -30 May 2020 -31 Jun 2020 -32 Jul 2020 -33 Aug 2020 -34 Sep 2020 -35 Oct 2020 -36 Nov 2020 -37 Dec 2020 1.00 1.00 1.00 1.00 1.00 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 %pa INM.MN.NZK 0.97 0.99 0.95 0.92 0.93 0.56 0.26 0.25 0.23 0.21 0.15 0.26 0.21 0.22 0.23 9.00 8.00 1.20 1.13 0.68 0.31 0.26 0.27 0.27 0.27 0.28 0.27 0.27 0.26 1.20 1.23 1.16 0.69 0.35 0.26 0.27 0.29 0.28 0.29 0.27 0.27 0.26 7.00 6.00 5.00 0.77 0.53 0.24 0.43 0.42 0.25 0.02 0.03 0.21 0.34 1.28 1.08 0.95 0.64 0.90 0.91 0.68 0.56 0.54 0.75 0.92 4.00 b 3.00 2.00 1.00 0.00 0 1 2 3 4 5 6 7 8 9 -38 -39 40 Aug-08 Dec-10 Nov-19 (Aug-08) ........ (Dec-10) .......(Nov-19)
