Market wrap: FOMC minutes, slightly dovish - Westpac

Analysts at Westpac offered a market wrap for the US session that was dominated by the FOMC minutes.

Key Quotes:

"Global market sentiment: An otherwise quiet evening session was disturbed by the FOMC minutes which were interpreted as slightly dovish. The US dollar and US interest rates slipped in response.

Interest rates: US 10yr treasury yields ranged sideways between 1.56% and 1.59% until the FOMC minutes, falling to 1.54% in response. Similarly, the 2yr was stuck between 0.74% and 0.76%, falling to 0.71% post minutes. Market pricing of the Fed funds rate slipped a bp, implying around a 20% chance of a rate hike in September, a 55% chance by December, and 100% by Sep 2017. Fed dove Bullard repeated his view that only one hike was likely over the next two years.

Currencies:  The US dollar index is unchanged after falling slightly following the FOMC minutes. EUR ranged around 1.1270 until the minutes, then jumping to 1.1316. USD/JPY fell from 101.00 to 100.04. AUD fell from 0.7680 to 0.7615 before the FOMC minutes caused a jump to 0.7674. NZD similarly fell from 0.7260 to 0.7207 before jumping to 0.7270. AUD/NZD ranged sideways between 1.0540 and 1.0580."