Global Themes

US bond yields return to highs as tomorrow night’s Fed hike looms

US bond yields climbed to their highest close since September 2014 overnight as markets looked to Wednesday night’s interest rate decision.

US market interest rates have risen steady over the last two weeks as Fed officials indicate they plan to raise US rates when they meet this week.

The US ten-year bond yield – a key benchmark of US interest rates – has jumped from 2.30% to above 2.61% in just two weeks.

Aussie higher

The Australian dollar was mostly higher overnight with the AUDUSD up 0.4%.

The AUD was higher versus the euro and Japanese yen.

The AUD fell versus the British pound. The pound was higher as the UK government indicated it was on course to trigger its exit from the EU by the end of the month.

Chinese data

While this week’s focus is on the Fed, today’s Chinese data, due at 1.00pm (AEDT), will also be key.

Industrial production, retail sales and fixed asset investment will provide details on the recent bounce in Chinese activity. This improvement in Chinese activity had recently boosted global market sentiment.

Also, business confidence is due at 11.30am.

By Steven Dooley -- Currency Strategist (APAC)

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