Market wrap: dollar unchanged despite strong US services report - Westpac

Analysts at Westpac offered a market wrap.

Key Quotes:

"Global market sentiment: A surprisingly strong US services report boosted interest rates. US equities performed well (S&P500 + 0.6%), as did oil (WTI +2.6%) to a three-month high).

Interest rates: US 10yr treasury yields rose from 1.67% to 1.73% (a two-week high), much of the move occurring after the strong ISM services report. 2yr yields jumped from 0.82% to 0.85% - a four-month high.

Fed hawk Lacker (non-voter) again said rates should rise more rapidly. Kashkari saw economic growth as steady but slow since the GFC.

Currencies:  The US dollar index is unchanged, after rising on the ISM services report but then fully retracing. EUR fell from 1.1230 to 1.1190 but retraced to 1.1220. USD/JPY rose from 102.80 to 103.64 – a one-month high. AUD extended its recent decline to 0.7593, as did the NZD which made a two-month low at 0.7149. AUD/NZD remained elevated at 1.0635 – a six-week high – supported by decent AU retail sales data yesterday."