Market wrap: Animal spirits were high - Westpac

Ross J Burland FXStreet

Analysts at Westpac offered a market wrap.

Key Quotes:

"Global market sentiment: Animal spirits were high, all the major US equity indices (S&P500, Dow, Russell, Nasdaq) making fresh all-time highs overnight. The US dollar was also buoyant, despite disappointing US PMIs (vs strong EU PMIs).

Interest rates: US 10yr treasury yields reopened after Monday’s holiday at higher levels, trading to 2.46% but later retracing to 2.41% where it closed on Friday. Shorter yields sustained gains, though, the 2yr in a higher 1.20%-1.22% range (vs 1.19% Fri) and the auction awarded at 1.23%. Fed fund futures implied rates were slightly firmer, the April contract at 0.72%, which implies around a 40% chance of a rate hike in March).

Currencies: The US dollar index is around 0.4% higher. EUR was the worst performing currency, falling from 1.0590 to 1.0526, ignoring a strong set of PMIs in favour of looming election risks. USD/JPY eked a slightly higher range of 113.40-113.80. AUD was capped by the stronger USD, ranging between 0.7650 and 0.7680. NZD initially fell from 0.7160 to 0.7130 (a one-month low) but recovered to 0.7165. AUD/NZD extended its month-old rally to 1.0738 – a four-month high. Fundamental news was cross supportive - iron ore rising 2.7% to $94.86( the highest since Aug 2014) while the GDT dairy auction recorded a 3.2% decline."

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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