Key points of this paper:
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The NZ 10 year government bond yield reached an all-time low of 3.82% on 17 November, well below long-term fundamental levels.
This has been part of a wider global move, driven by weak US and European growth, a deteriorating European sovereign debt crisis, and strains appearing in credit markets.
While the markets are left hoping for yet another European rescue package, the underlying factors depressing yields are not likely to change soon.
So NZ interest rates look set to stay low for some time yet, especially while NZ continues to move in tandem with 'core' sovereign bond markets.