Market and economic wrap: dollar slightly down - Westpac

Analysts at Westpac offered a market and economic wrap.

Key Quotes:

"Global market sentiment: 

It was a quiet night newswise, with markets fairly stable. The USD preserved most of Friday’s gains, while AUD/NZD nudged higher amid a 3% gain in iron ore and ahead of the RBNZ on Thursday.

Interest rates: 

US 10yr treasury yields slipped from 2.28% to 2.25% and 2yr yields slipped from 1.36% to 1.35%. Fed fund futures yields slipped, pricing the chance of a December rate hike at around 42%. The above moves occurred before some dovish comments from Bullard and Kashkari.

Currencies: 

The US dollar index is down 0.1% on the day. EUR was contained between 1.1780 and 1.1815. USD/JPY similarly eked a narrow sideways range between 110.65 and 110.95. AUD fell from 0.7940 to 0.7899. NZD again underperformed (ahead of the RBNZ MPS on Thu), falling from 0.7400 to 0.7348 – a two-week low. AUD/NZD rose from 1.0720 to 1.0758 – a two-week low – helped by positioning ahead of the RBNZ MPS as well as iron ore’s 3% gain yesterday (up 43% since mid-June).  

Economic wrap:

FOMC dove (and non-voter) Bullard said he is worried about the softness in inflation, and didn’t expect falling unemployment to provide a boost to such. He supported a start to tapering soon. Dove (and voter) Kashkari thought the economy was doing well but wage growth was slow..

Event risk:

In Australia we have NAB business confidence, which has been trending higher over the past year. China has the July trade balance, often a market mover. The median estimate is CNY 293.55bn. JOLTS job openings in the US is watched by the Fed, particularly the quit rate."