Market wrap: risk appetite fading - Westpac

Analysts at Westpac offered a market wrap of U.S. closing session with risk appetite fading.

Key Quotes:

"Global market sentiment: 

Risk appetite faded a little into the weekend, after Thursday’s FOMC-inspired surge. AUD softened modestly while NZD underperformed. US treasury yields were little changed while crude oil prices slid more than 3% after Saudi Arabia doused hopes for an agreement on output this week.

Interest rates: 

US 10yr treasury yields closed flat on the day at 1.62%, with the range a narrow 1.605% to 1.63%. The pullback in equities was seen in the context of Thursday’s gains and news flow was limited. However, the 2 year treasury slipped 2bp to 0.75%. Pricing for a Fed rate hike in Dec eased from 52% to 48% (CME measure).

Currencies: 

EUR/USD chopped slightly higher, from 1.1200 to 1.1240 before closing around 1.1225. USD/JPY continued to avoid 100.00 despite disappointment over Wednesday’s BoJ meeting, recovering from a dip under 100.70 to close slightly higher overall, around 101.

AUD/USD came under pressure in the London morning, dipping as low as 0.7610, but recovered to 0.7640 before finishing the week a little lower, around 0.7625.

NZD/USD continued its bad week by extending its local session decline in NY, to as low as 0.7225. This meant AUD/NZD’s week old rally accelerated to 1.0543, another one-month high, before closing around 1.0525."