Market wrap: China may slow purchases of US treasuries - Westpac

Analysts at Westpac offered their market wrap.

Key Quotes:

"Global market sentiment: US bond yields rose and the US dollar fell after a report that China may slow purchases of US treasuries.

Interest rates: US 10yr treasury yields rose from 2.54% to 2.60% - the highest since March 2017 – after a Bloomberg report claimed unnamed China officials had recommended slowing or halting purchases of US treasuries. Late in the NY session yields retreated to 2.56%. 2yr treasury yields spiked from 1.96% to 1.98% after the report, and are currently at 1.97%. Fed fund futures priced the chance of another rate hike in March at 68%.

Currencies: The US dollar index shed 0.5% in response to the China headlines, and is currently down 0.3% on the day. EUR rose from 1.1923 to 1.2018, later slipping back to 1.1960. USD/JPY fell from 112.35 to 111.27. AUD rose from 0.7810 to 0.7867. NZD rose from 0.7160 to 0.7230 – the highest since Oct 2017. AUD/NZD made a roundtrip from 1.0910 to 1.0871 (one-month low) and back."