US dollar and US bond yields fairly stable ahead of FOMC - Westpac

Analysts at Westpac offered a market wrap.

Key Quotes:

"Global market sentiment: The US dollar and US bond yields were fairly stable overnight, with little fresh news of note and a looming FOMC statement.

Interest rates: US 10yr treasury yields ranged sideways between 2.36% and 2.38%, while 2yr yields rose from 1.57% to 1.59%. Fed fund futures yields remained elevated, pricing the chance of a December rate hike at 96%.

Currencies: The US dollar index is unchanged on the day. EUR remained confined to a 1.1625-1.1660 range. USD/JPY rose from 113.00 to 113.73. AUD slipped from 0.7690 to 0.7640 before steadying around 0.7660. Underperformer NZD fell from 0.6865 to 0.6831, the earlier disappointing business confidence report weighing. AUD/NZD remained rangebound between 1.1175 and 1.1220.

Economic Wrap

US consumer confidence (Conference Board) jumped from 120.6 to 125.9 (vs 121.5 expected) – a 17-year high, helped by the global recovery, equity and house price gains, and manufacturing activity. Chicago PMI rose from 65.2 to 66.2 (vs 60.0 expected). All the PMIs have been strong lately, and auto sales have bounced too. Corelogic house pricesrose 0.45% in Aug, for a 5.9% annual pace – an increase from July’s 5.8%."