Market wrap: risk-off trade continues to fade - Westpac

Analysts at Westpac offered their wrap up of the US session and events.

Key Quotes:

"Market Wrap

Global market sentiment: Concerns about North Korea appeared to fade, lifting equities and US bond yields. The US dollar also gained, hurting AUD/USD and NZD/USD.

Interest rates: US 10yr treasury yields rose from 2.20% to 2.23%, 2yr yields from 1.30% to 1.32%. Fed fund futures yields firmed, pricing the chance of a December rate hike at around 43% (from 37%). Contributing to the yield rise was Fed dove Dudley who thought another hike this year is appropriate.

Currencies: The US dollar index is up 0.4% on the day. EUR fell from around 1.1840 to 1.1770. USD/JPY rose from 109.40 to 109.80. AUD fell from 0.7900 to 0.7846. NZD fell from 0.7320 to 0.7282. AUD/NZD fell from 1.0810 to 1.0767.

Economic Wrap

No data to report.

NY Fed Pres. Dudley said in an AP interview that he backed another rate hike this year, assuming the economy evolves as expected, adding that accommodation removal so far had been “very, very gentle”. He also repeated that the market’s expectation that balance sheet reduction would begin in September was not unreasonable."