Market wrap: Fed leaves door open for a June hike, dollar takes off - Westpac
|Analysts at Westpac offered a market wrap.
Key Quotes:
"Global market sentiment: The Fed left the door open to a June hike in its FOMC statement, giving the US dollar and interest rates a small boost.
Interest rates: US 10yr treasury yields rose from 2.28% to 2.32% while. 2yr yields rose from 1.26% to 1.30%.Fed fund futures yields firmed, now pricing a June rate hike as an 80% chance.
Most of the rate rises came after the FOMC statement, where the Fed viewed the recent soft patch in the economy as transitory, the inflation narrative also tweaked slightly.
Currencies: The US dollar index is 0.3% higher, most gains occurring after the FOMC statement. EUR fell from 1.0935 to 1.0893. USD/JPY extended recent gains from 112.00 to 112.67 – a six-week high. AUD underperformed, falling from yesterday’s high of 0.7540 to 0.7421. NZD similarly fell from 0.6969 to 0.6867. AUD/NZD slipped further from 1.0820 to 1.0775."
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