US reflation theme gripping markets - ANZ

Analysts at ANZ explained that the strong US data overnight saw markets price in more Fed tightening over the year ahead.

Key Quotes:

"A December hike is already priced at 100% odds, but markets are now putting decent odds on a follow- up move by June. The US dollar surged in response, and long-run yields lifted again.

Risk appetite and equities held up pretty well in response, but one does wonder when the two sharp recent moves charted below – US long rates and the US exchange rate versus the Chinese yuan – are going to become problematic in their own right (for markets or politicians)." 

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