Global market sentiment remained elevated - Westpac

Analysts at Westpac offered a market wrap.

Key Quotes:

"Sentiment remained elevated following yesterday's passage of tax reforms through the US Senate. The S&P500 is up 0.5% to a fresh record high and the US dollar is stronger.

Interest rates: US 10yr treasury yields shed some of yesterday's tax-reporm related gains, slipping from 2.41% to 2.38%. 2yr yields remained elevated at 1.81% - a nine-year high. Fed fund futures yields continued to price the chance of a December rate hike at 100%.

Currencies: The US dollar index is up 0.4% on the day. EUR slipped from 1.1875 to 1.1829. USD/JPY ranged sideways between 112.65 and 113.10. AUD ranged sideways between 0.7580 and 0.7615. NZD ranged sideways between 0.6840 and 0.6870. AUD/NZD rose from 1.1070 to 1.1105, helped by iron ore's 3.7% gain (to $72.69 - a two-month high).

Event Risk:

NZ: RBNZ Governor Spencer speaks about "low inflation".

Australia: The RBA policy decision is expected to be on hold. It is unlikely that the statement will be materially changed, but a possible point of difference may be around the currency given that the AUD TWI has fallen back to near 2017 lows. Q3 National accounts partials are released. Net exports are expected to add 0.3ppts to GDP growth (Westpac +0.2ppts), with the current account deficit broadly stable at -$8.9bn (Westpac -$9.4bn). Westpac expects the public demand figure to be up 0.6% led by an upswing in investment. Oct retail sales is seen to rise 0.3% following a subdued Q3.

Euro Area: Q3 GDP 3rd estimate is expected to confirm the flash of 0.6%.

US: Nov ISM non-manufacturing is anticipated to edge back from October’s historic high of 60.1 to 59.0. In addition, the Markit services PMI is seen to tick up to 55.3 having been relatively restrained in comparison."