Market wrap: markets await for the BoJ and Fed announcements - Westpac

Analysts at Westpac offered a market wrap.

Key Quotes:

"Global market sentiment: Ahead of the BoJ and Fed announcements, bond markets pared bets that long-term yields would rise. Equity and commodity markets were contained though, and the US dollar is little changed.

Interest rates: US 10yr treasury yields fell from 1.70% to 1.66% before retracing to 1.69%, 10yr German bund yields fell from +0.2% to -0.2%, and 10yr Japanese JGB yields slipped from -0.05% to -0.06%.

Market pricing of the Fed funds rate firmed slightly, implying around a 25% chance of a rate hike tomorrow, a 70% chance by December, and 100% by April 2017.

Currencies:  The US dollar index is around 0.1% higher. EUR fell from an early spike high of 1.1213 to 1.1155. USD/JPY eked a narrow sideways range of 101.54-101.97. AUD also traded sideways, between 0.7539 and 0.7565. NZD was volatile, though. Having risen to 0.7358 in expectation of a strong GDT dairy auction (futures had priced +11% for WMP), it fell to 0.7304 after WMP prices fell 0.2%. AUD/NZD rose accordingly, bouncing off 1.0268 to 1.0331."