Analysts at Westpac offered a market wrap.
Key Quotes:
"Global market sentiment: Risk sentiment continued to be decline with stocks slipping in Europe and US (S&P500: -0.7%, German Dax: -2.26%) in advance of the first US presidential debate. Concerns over Deutsche bank hit Europe and the financial sector. Oil rose (WTI +3.3% to $45.95/bbl) on Saudi hopes for OPEC accord (meeting Wed) and potential of reserve draws taking the whole energy complex higher. Fed and ECB speakers, notably Draghi, kept markets debating the prospects for December rate hikes in US and QE in Europe with further policy makers speaking throughout this week.
Interest rates: Fixed income yieldsclosed near their daily lows, led by a -4.5bps slide in US 10yr note yieldsto 1.5750% with 2yr yield down-2.85bp to 0.7255%. 10yr Bund yields slipped further into negative (-0.4bps to -0.012%) as the pre-FOMC rise in yields continued to unwind.
Currencies: Presidential debate jitters saw USD on the defensive against majors but in low activity with USD/JPY near its lows at 100.35 (100.28-101.15 range). EM was mixed (Turkey weakened on Moody’s downgrade to junk status).
Early NZD softness was unwound during the European session and NZD/USD ended at 0.7285 near the highs of its 0.7222-0.7287 range. Although AUD/USD remained firm at 0.7440 (0.7603-0.7649 range), AUD/NZD clawed back to 1.0490 (1.0490-1.0545 range)."
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