Global market wrap: US yields dominate - ANZ

Analysts at Westpac explained that the US 10 year treasury yield extended the past week's rise to 3.03%, a 4+ year high and seemingly driving another day of broad US dollar gains and offered a full market wrap.

Key Quotes:

"Over the week, the US dollar has risen against all G10 currencies, whose losses range from -1.5% for the Swiss franc to -3.4% for the kiwi."
"AUD is -2.8% over the week, second softest.

AUD/USD started holiday-affected trade Wednesday around 0.7600 but followed the broad US$ trend into NY, reaching 0.7552 – the lowest since 13 December.

NZD fell from above 0.7100 to 0.7058 – the lowest since 26 December. AUD/NZD rose from 1.0680 to 1.0715 – a one-month high."

"GBP/USD tried to rally to 1.4000 in Asia, then slid back to 1.3925. EUR/USD traded heavily ahead of the ECB meeting, falling from 1.2240 to around 1.2160 – a two-month low."

"USD/JPY rose from 109.00 to 109.45 – a high since early Feb, and has appreciated 5% since late March. USD/JPY is often sensitive to the US 10 year yield. Meanwhile the 2yr yield rose from 2.49% to 2.50% - the highest since 2008 – but later retraced to 2.48%."

"Fed fund futures yields still price >90% chance that the next rate hike will be in June, but pricing for a move next week has ticked up to about 5% according to Bloomberg. Data was again not key to the sharp US dollar and yield moves, with no notable releases."

"The Canadian dollar outperformed, USD/CAD about flat on the day in the mid-1.28s. Crude oil prices slipped a little from highs dating to late 2014."