Market wrap: dollar down on european currency advances - Westpac

Analysts at Westpac offered a market wrap.

Key Quotes:

"Global market sentiment: Risk-seeking accelerated yesterday, pushing some equity indices (e.g. NASDAQ, MSCI World) to record highs, and bond yields higher. Revised expectations regarding US reforms and fading geopolitical risks were among the catalysts.

Interest rates: US 10yr treasury yields rose from 2.26% to 2.34%, 2yr yields from 1.23% to 1.28%.. Fed fund futures yields rose, now pricing a June rate hike as an 80% chance (60% on Mon).

Key drivers at present include expectations of Trump’s tax reform announcement tonight, as well as risks of a US Government shutdown as the spending plan deadline on 28 Aprillooms.

Currencies: The US dollar index is down 0.3%, mainly due to outperformances by the European currencies. EUR rose from 1.0860 to 1.0950 – the highest since mid-November – helped by a Reuters story from unnamed ECB sources that it may tweak its policy guidance slightly in a hawkish direction at its June meeting. Continued relief regarding the French election result was probably also at play. USD/CAD rose from 1.3550 to 1.3626 – the highest since Feb 2016 – after the US Administration imposed tariffs on Canadian lumber imports. USD/JPY rose from 109.60 to 111.19, the safe-haven yen the worst performer on the day. AUD fell from 0.7570 to 0.7521, probably affected by the US trade protection move. NZD did even worse for the same reasons, falling from 0.7015 to 0.6941. AUD/NZD extended its multi-day rally to 1.0854."