Market wrap: bond yields rose amid elevated expectations of this week’s US GDP data – Westpac

Imre Speizer, Head of NZ Strategy, an analyst at Westpac Banking Corporation, offered a market wrap.

Key Quotes:

“Global bond yields rose amid elevated expectations of this week’s US GDP data, as well as speculation Japan’s central bank is considering refining its yield curve control policy

Global bond yields rose amid elevated expectations of this week’s US GDP data, as well as speculation Japan’s central bank is considering refining its yield curve control policy. The Bank of Japan meets Monday/ Tuesday next week for its next quarterly ‘outlook’ meeting.

FX, commodity and equity markets were relatively contained. The US dollar index is up 0.2% on the day. EUR fell from 1.1740 to 1.1684. USD/JPY rose from 111.00 to 111.50. AUD fell from 0.7420 to 0.7372. NZD fell from 0.6820 to 0.6777. AUD/NZD eked a slightly lower range of 1.0870-1.0885.

US 10yr treasury yields rose from 2.88% to 2.96% – the highest since mid-June – and 2yr yields rose from 2.58% to 2.63% – the highest since 2008. Fed fund futures yields are now pricing almost two more full hikes in 2018.

Jul Markit flash PMIs for Japan, Europe and the US are released. The US manufacturing PMI had remained more buoyant than Japan and Europe but turned down in Jun, while Japan and Europe steadied from earlier declines.”