A USD story overnight - ANZ

Analysts at ANZ explained that it was a USD story overnight, with us earnings reports and a plethora of us data coming in mixed/strong providing a solid backdrop.

Key Quotes:

The NZD/USD still looks extended around current levels and we favour fading strength.

Rates: likely to open with a mild bias higher following the rise in US yields.

Global markets overview: equities turned lower during the NY afternoon with the USD strengthening.

The US treasury bond curve bear steepened. It’s difficult to pinpoint a catalyst for the move – extremely low volatility may finally be spooking some investors, possibly it was treasury secretary Munchin's comment that currency manipulators should face “real” impacts.

Late in the afternoon, it was leaked that Ryan believes the border adjustment tax is dead, adding more policy uncertainty.

Volatility spiked with VIX up as much as 18% to 11.4 with s&p 0.6% lower and NASDAQ off 1.1% at the time of writing.

The DJIA was up slightly as telecommunications offset materials and financial declines. European bourses closed before the US selloff with the Stoxx Europe 600 down 0.1% and FTSE 100 down 0.2%. The usd recouped some recent losses with CHF, NOK and cad leading declines.

Treasuries were sold, with 10 year back to 2.30 (+2bps). Oil shrugged off the stronger dollar, climbing about 0.9% and gold was steady at usd1260/oz.