Global markets overview: a firm start for USD - ANZ

Analysts at ANZ noted that the USD has made a firm start to Q4 as optimism over a Clinton victory and growing confidence that US economic activity may accelerate helps to support the currency.

Key Quotes:

"The market is currently 61% priced for a December rate hike and if Friday’s NFP release is broadly in line with the monthly average so far this year (180k), those expectations are likely to increase.

Fixed income markets are duly reflecting that expectation and the yield on the US 10-yr note continued to push higher to 1.67%.

Down beat sentiment in Europe ranging from Brexit in the UK, to anxiety over the banking system and the forthcoming political calendar have also helped the USD despite the risks associated with the upcoming US election.

Increasingly, it is looking as if the soft August data in the US was something of an anomaly and a rebound in the Sept non-manufacturing ISM due tonight (expected at 53.0 vs 51.4) would help to confirm that.

Elsewhere there were unconfirmed headlines suggesting the ECB are near to consensus on the need to taper QE before it ends. When this occurred in the US it was yield positive, but negative for equities and commodity prices. So watch this space."