Market wrap: ECB disappoints - Westpac

Analysts at Westpac offered a market wrap.

Key Quotes:

"Global market sentiment: The ECB kept policy unchanged but its lack of dovish guidance disappointed markets. Bund yields rose, leading other global yields higher. Oil prices rose around 4% after a surprisingly large drop in inventories was reported.

Interest rates: US 10yr treasury yields rose from 1.54% to 1.62% following the ECB disappointment which pushed 10yr German bund yields from -0.11% to -0.05%.  Market pricing of the Fed funds rate also rose, implying around a 30% chance of a rate hike in September, a 70% chance by December, and 100% by May 2017.

Currencies:  The US dollar index is slightly higher. EUR rose ahead of and during the ECB announcement, from 1.1245 to 1.1327, but retraced in NY to 1.1241. USD/JPY rose from 101.60 to 102.59. AUD initially rose from 0.7680 to 0.7732 but fell in NY to 0.7640. NZD similarly fell from an overnight high of 0.7482 to 0.7385. AUD/NZD extended yesterday’s rebound from 1.0275 to 1.0370."