Market wrap: a cooler mood in European and US sessions - Westpac

Analysts at Westpac offered a market wrap noting that Asia's strong equity gains were followed by a cooler mood in Europe and North America while the US dollar softened in line with lower bond yields.

Key Quotes:

"EUR/USD ranged between roughly 1.2290 and 1.2340, a little firmer overall, while GBP/USD rose 0.4% in NY trade to just over 1.3900. CAD was the G10 underperformer as crude oil prices gave up some of Friday’s gains.

USD/JPY extended the Sydney session decline to near 106.30, only about -0.4% on the day but showing some sign of unease over Japanese political stability. The Ministry of Finance admitted that documents relating to the sale of land had been doctored. Finance minister Taro Aso said he is not thinking of resigning but Japanese press claim he will not attend the G20 meeting in Argentina this month.

AUD extended a week-old rally to 0.7880. In contrast, NZD slipped from a multi-week high of 0.7323 to 0.7285. AUD/NZD thus rose from 1.0750 to 1.0800.

The US data calendar was limited to the Feb budget statement, which showed a sharp widening in the deficit as expected, to -$215bn, the largest monthly deficit since 2012. Treasury spending rose 2%yr, while receipts fell 9%yr, as the tax cut package began to take effect. The US 10yr treasury yield slipped from 2.90% to under 2.87% in the NY afternoon as US equities lost momentum, while 2yr yields ranged sideways between 2.26% and 2.27%. Fed fund futures continued to price three more hikes by end-2018 and another hike in 2019."