Market wrap: sentiment takes-off on ECB news - Westpac

Analysts at Westpac offered a market wrap.

Key Quotes:

Global market sentiment: Sentiment soured overnight after a Bloomberg report said the ECB is intending to taper its QE program. The ECB issued a denial, but bond yields are higher, the S&P500 is down 0.7%, and the AUD and NZD are lower.

Interest rates: US 10yr treasury yields started rising from midday London, from 1.61% to 1.63%, and then accelerated to1.69% after the ECB story. German 10yr bunds rose from -0.09% to -0.04% in response.

Fed hawk Lacker (non-voter) predictably said rates need to rise, but helped nudge short-term rates higher nonetheless. US 2yr yields are up from 0.79% to 0.82%.

Currencies:  The US dollar index rose by around 0.5%, making a two-month high. EUR initially slid from 1.1200 to 1.1138, but bounced to 1.1239 following the ECB story. USD/JPY rose from 102.05 to 102.97 – a three-week high. AUD fell from 0.7680 to 0.7608. NZD fell from 0.7290 to 0.7198 – a two-month low. AUD/NZD rose from 1.0510 to 1.0574, helped by another disappointing GDT dairy auction.