Daily Alert: USD and US Treasury yields fall on dovish Powell comments

  • As was widely expected the US Federal Open Market Committee held the Federal funds rate at 0-0.25% and maintained its USD120bm in monthly asset purchases.
  • This triggered a seesaw reaction in markets and treasury yields initially ticked up but are currently 1-2bps below pre-announcement levels (10Y 1.23%) while equity markets were cheered by the signal that interest rate rises still were a long way off and firmed post-FOMC.
  • Locally, the full July reading of the ANZ NZ business outlook at 1pm should confirm resilient business sentiment at a time of elevated cost, inflationary and capacity pressures.

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