Market wrap: US dollar rose after ECB - Westpac

Analysts at Westpac offered a market wrap.

Key Quotes:

"Global market sentiment: The US dollar and equities rose after the ECB extended its QE program, hurting AUD/USD and NZD/USD.

Interest rates: US 10yr treasury yields rose from 2.34% to 2.42%, while 2yr yields rose from 1.09% to 1.13% before retracing to 1.10%. Fed funds futures continued to imply a 100% chance of a rate hike on 14 December, with two more rate hikes priced in for 2017. The rise in US yields could be a response to more stimulus from the ECB during a potential reflationary fiscal environment in the US.

German 10yr bund yields initially rose from 0.35% to 0.46% amid market debate about how dovish the ECB announcement was, but later retraced to 0.38% as the tapering element was seen as trumped by the longer time extension.

Currencies:  The US dollar index is 0.9% higher. EUR initially spiked higher to 1.0874 after the ECB announcement, as some were disappointed by the tapering aspect, but quickly reversed and didn’t steady until 1.0598 as the other more dovish elements were factored in. USD/JPY rose from 113.20 to 114.20. AUD fell from 0.7508 to 0.7429. NZD fell from 0.7220 to 0.7150. AUD/NZD ranged sideways between 1.0380 and 1.0410."