Market wrap: USD higher on Yellen - Westpac

Analysts at Westpac offered a market wrap.

Key Quotes:

"Global market sentiment: The US dollar rose to a fresh 14-year high after Fed Chair Yellen helped cement market expectations for a December rate hike. That caused the AUD and NZD to fall, despite risk sentiment remaining healthy (S&P500 +0.4%, oil +0.4%).

Interest rates: US 10yr treasury yields initially rose from 2.19% to 2.27%, while the 2yr yield rose from 0.99% to 1.03%. Most of the rise occurred after Yellen’s speech (see below), the mixed US data roughly neutral for markets. Fed funds futures firmed, now implying almost a 100% chance of a rate hike in December. Futures are also pricing one rate hike during each of the next three years.

Currencies:  The US dollar index rose to a fresh 14-year high, with most of the overnight rise occurring after Yellen’s speech. EUR fell from 1.0746 to 1.0630 – the lowest since Dec 2015. USD/JPY rose from 108.90 to 109.88 – a six-month high. Underperformer AUD fell from 0.7488 to 0.7420 – a four-month low. NZD fell from 0.7110 to 0.7025 – a four month low. AUD/NZD ranged between 1.0520 and 1.0570."