Market wrap: US dollar took the lead again and oil's 9% rally - Westpac

Analysts at Westpac offered a market wrap.

Key Quotes:

"Global market sentiment: The US dollar rose overnight amid several USD-supportive events. US profit repatriation comments a strong ADP payrolls report, and higher US bond yields (possible related to oil’s 9% surge post-OPEC’s supply-cut agreement) helped the USD outperform the AUD and NZD.

Interest rates: US 10yr treasury yields rose from 2.30% to 2.41%, probably reacting to oil’s surge plus the stronger US data. The 2yr yield rose from 1.09% to 1.13%. Fed funds futures continued to imply a 100% chance of a rate hike in December, with two more rate hikes priced in for 2017. Fed speaker Kaplan advocated removing some accommodation, as did Mester, while Powell spoke about communication.

Currencies:  The US dollar index jumped 0.6% overnight. EUR fell from 1.0665 to 1.0553. USD/JPY rose from 112.50 to 124.54 – a nine-month high. AUD performed poorly, falling from 0.7485 to 0.7374, mainly due to US strength but the 7.2% fall in Iron ore yesterday no doubt also played a part. NZD fell from 0.7170 to 0.7070. AUD/NZD extended a multi-day decline from 1.0475 to 1.0413."