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Analysts at Westpac offered a market wrap.

“In the FOMC minutes, a few lines stood out: (1) A strong hint re the 13 June meeting, “it would likely soon be appropriate for the Committee to take another step in removing policy accommodation”; (2) There seems to be a lack of urgency to tighten more aggressively given that “modestly above 2 percent would be consistent with the committee’s symmetric inflation objective and could be helpful in anchoring longer-run inflation expectations,” and “many” saw only “muted” wage pressure; while a “few” noted neutral will be in sight…before too long,” which would require rewording the existing guidance that policy is accommodative.”

“The US 10yr treasury yield fell from 3.05% to 2.99% – mostly pre-FOMC minutes – and 2yr yields fell from 2.59% to 2.53% – mostly post-minutes. Fed fund futures yields fell by between 4 and 9 basis points along the curve. A June hike is still seen as very likely (around 85% on Bloomberg calculations) and another sometime during H2 2018, but no longer much risk of 2 hikes in H2.”

“EUR/USD fell from 1.1760 to 1.1676 – a six-month low. The Eurozone May business surveys softened more than expected and Italian politics remains very fluid as the coalition parties try to agree on a prime minister. While the -1.3% close on Milan shares was in line with other Eurozone bourses, Italian bonds stood out, the 10 year yield rising 7 basis points on a day of lower yields globally.”

“AUD/USD fell from 0.7580 to 0.7523 in London before retracing to 0.7560 after the FOMC minutes as US equities bounced. RBA governor Lowe’s speech on China appeared to have no FX impact, though most headlines were about his warning on China’s high debt levels. NZD fell from 0.6940 to 0.6884 before retracing to 0.6923. AUD/NZD ranged sideways between 1.0910 and 1.0945.”

“USD/JPY fell from 110.50 late Sydney to 109.56 before steadying around 110.10/20, the safe-haven yen outperforming, along with the Swiss franc.”

“GBP/USD fell 0.6% over the day to 1.3350, with some of the decline coming as UK inflation data for April showed a slightly faster path of decline in CPI than anticipated (headline 2.4% vs expected 2.5%, core 2.1% vs expected 2.2%). The main downside drivers were food and clothing, in a sign that the core retail sector remains under pressure.”