US dollar retains a firmer tone, euro losing the bid - ANZ
|Analysts at ANZ explained that the US dollar retained its firmer tone overnight as US bond yields continued to edge higher and some of the post ECB rally in EUR/USD unwound further.
Key Quotes:
"China’s move last Friday to free up yuan forwards trading is likely also continuing to play a role. The US July JOLTS report came in at a record high, which coupled from comments from US Treasury Secretary Mnuchin expressing confidence about getting tax reform through, underpinned expectations that solid US growth will continue. GBP was firmer following the higher-than-expected inflation print for August. The market is keenly focused on upcoming US CPI data as it positions itself ahead of next week’s FOMC meeting."
"Expectations for a 25bps December rate hike have rebounded to around 40% from 26% last Friday. The yield on the US 10-yr note rose 4bps to 2.17% whilst the 10-yr bund yield rose 6.4bps to just under 0.40%. UK 10-yr yields rose 9bps to 1.13% as risk-off sentiment continued to recede, and on the inflation surprise."
"Equities had a firmer tone with the DAX up 0.4% and the CAC 40 up 0.6%, but the FTSE 100 fell 0.2% as GBP firmed. The S&P500 is up 0.2% and the DJIA up 0.3% at the time of writing. Both oil and gold were modestly firmer (WTI +0.4% at USD48.25/bbl; gold spot +0.2% at 1330/oz)."
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