The Reserve Bank of New Zealand unexpectedly cuts interest rates, steepening yield curve trades.

According to the Wise News Finance APP, the so-called "steepening" trades conducted by global bond funds are now being supported by the Reserve Bank of New Zealand. The Reserve Bank of New Zealand first announced a rate cut on Wednesday, followed by an unexpectedly dovish statement, causing the country's 2-year bond yield to drop by 16 basis points as traders readjusted their rate expectations. This is good news for investors betting on a steepening yield curve, as this strategy can be profitable when the gap between long-term and short-term bond yields widens. However, the 30-year bond yield of New Zealand only dropped by about 7 basis points.