Market wrap: markets await FOMC tonight - Westpac

Analysts at Westpac offered a market wrap leading into the early Asian session.

Key Quotes:

"Global market sentiment: Most markets were contained ahead of tonight’s FOMC decision, although AUD and NZD did extend yesterday afternoon’s rallies.

Interest rates: The US curve flattened further overnight, 2yr treasury yields rising from 0.74% to 0.77% - a fresh one-month high. Market pricing of the Fed funds rate was little changed, implying a 30% chance of a rate hike in September, a 60% chance by December, and 100% by Sep 2017. 10yr yields ranged sideways between 1.55% and 1.59%.

Currencies:  The US dollar index pulled back slightly. EUR initially rose from 1.0990 to 1.1030 but then fell to 1.0978. USD/JPY pared some of the day’s loss, rising from 104.00 to 104.98. AUD extended yesterday afternoon’s rise to 0.7540 before slipping back to 0.7505. NZD similarly extended to 0.7086 before slipping back to 0.7033. AUD/NZD fell from 1.0680 to 1.0635."