US session market wrap: mixed sentiment, awaiting tax reform conclusions - Westpac

Analysts at Westpac offered a market wrap for Friday's closing session.

Key Quotes:

"Global market sentiment: US bond yields rose, and equities and the US dollar were slightly weaker, amid continuing uncertainty about the content and timing of US tax reforms.  

Interest rates: US 10yr treasury yields rose from 2.34% to 2.40%, 2yr yields from 1.64% to 1.66% - a fresh high since Oct 2008. Fed fund futures yields continued to price the chance of a December rate hike at almost 100%. UK govt. bond yields rose after some strong data and upgraded GDP forecasts, the 10yr up from 1.27% to 1.35%.

Currencies: The US dollar index closed down 0.1% on the day. EUR rose from 1.1640 to 1.1678. USD/JPY ranged sideways between 113.25 and 113.65. AUD slipped from 0.7695 to 0.7654. NZD remained subdued between 0.6923 and 0.6954. AUD/NZD slipped from 1.1080 to 1.1036.

Economic Wrap

US consumer sentiment (Michigan Univ.) fell from 100.7 to 97.8 (vs 100.8 expected). Inflation expectations for 1 year ahead rose from 2.4% to 2.6%, while 5yr-10yr expectations were unchanged at 2.5%.

FOMC member Bullard thought the current Fed Funds rate was about right, and that a rate hike in December could send the wrong signal and depress inflation expectations."