MArket action overnight: dollar retains form - ANZ

Analysts at ANZ explained the action from overnight as we head into Tokyo.

Key Quotes:

"The USD retained its firmer tone overnight as expectations for a Fed rate hike later this month continued to build (now at 90%). Treasuries weakened further, with the yield on the 10-year note lifting 4bps overnight to 2.50%, its highest level since mid-February."

"Importantly, equity markets appear to be largely taking this surge in Fed rate hike expectations in their stride, although major US bourses were modestly lower at the time of writing, with the S&P 500 currently off all-time highs (-0.4%). Equity market volatility also remains remarkably subdued, with the VIX at just 11.8."

"Higher yields were also a theme in Europe, with 10-year yields up across the board. The French-German 10-year bond spread fell to 61bps, its narrowest level since the end of January. European equities were largely flat. In commodity markets, oil prices remain in a reasonably narrow range, with WTI falling 1.8% to $52.8/bbl. Gold was also weaker, dropping 1.3% to $1233/oz."