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In a market wrap, analysts at ANZ Bank New Zealand Limited explained that US equities rose following the weaker CPI and the USD declined.  

Key Quotes:

“Treasury yields were little changed and oil fell.”

“The BoE decision kicked off the overnight session with 9-0 voting to keep everything on hold. There was little market reaction.”

“Turkey’s central bank lifted its policy rates 625bp to an eye-watering 24%, seeing the lira lift 4% and supporting other EM currencies. The ECB was next, with Draghi’s positive comments sending EUR higher.”

“President Trump then tweeted that he felt no pressure to do a trade deal with China, causing some unwind of the positive risk sentiment.”

“However, US equities remain up solidly (Dow and S&P 500 +0.5%, Nasdaq +0.7%).”

“Hurricane Florence on the east coast lost some power, sending oil lower during the trading session, with WTI spot down 2.3% to USD68.73 at the time of writing. The USD fell against all but JPY in the G10. Gold is down 0.4% at the time of writing.”

“No surprises from the Bank of England – moderate economic growth, rising Brexit uncertainty, and rate rises to be gradual and limited. Q3 growth might be a bit stronger and there is some evidence of tight labour supply underpinning higher wage settlements. The current monetary guidance is sensible and appropriate. All up, nothing that should unduly influence GBP.”

“The ECB was next up: it maintained rates and kept forward guidance on its asset purchase program and rate outlook unchanged. It is confident in its inflation forecasts and expects a “substantial” pick up in core inflation next year underpinned by solid growth (2.0% this year) and rising wages. The confidence the ECB expressed helped to support the EUR.”

“Certainly the RBNZ is an outlier with the market pricing in a decent chance of cuts, which is an important factor keeping the NZD under pressure.”

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