Analysts at Westpac offered a market wrap.
“Global market sentiment: US bond yields fell slightly ahead of a White House statement on Iran, while the US dollar is unchanged.
Interest rates: US 10yr treasury yields fell from 2.35% to 2.32%, while 2yr yields ranged between 1.51% and 1.52%. Fed fund futures yields continued to price the chance of a December rate hike at 87%.
Currencies: The US dollar index is unchanged on the day. EUR fell from1.1880 to 1.1827. USD/JPY ranged between 112.10 and 112.45. AUD rose from 0.7810 to 0.7836. Outperformer NZD rose from 0.7100 to 0.7146. AUD/NZD fell from 1.1010 to 1.0960.
US PPI rose 0.4% in Sep (as expected), although the ex-food and energy measure also rose 0.4% (vs 0.2% expected). Annual PPI growth is at 2.6%.
Fed commentary came from Bullard: the Fed risks losing credibility if it doesn’t defend the inflation target, Brainard: the Fed could better time rate hikes after future recessions, and Powell: there’s risk of a market “tantrum” due to low volatility currently. ECB Pres. Draghisaid it didn’t see sufficient progress on wage inflation.”