Key events from overnight - ANZ

Analysts at ANZ explained the key events overnight.

Key Quotes:

"ECB President Draghi spoke in Frankfurt but failed to elaborate on last Thursday’s comments, whilst Banque de France Governor Villeroy said that the fear of inflation was exaggerated."

"He also noted that whilst the ECB observed that the economic situation is improving, it [the economy] is not there yet. EUR/USD drifted lower but volumes were thin and conviction low ahead of the FOMC."

"The yield on the US 10-yr note rose to 2.61% and oil prices eased (WTI -0.3% at $48.4/bbl). Stocks had a mixed day with the S&P unchanged at the time of writing and the DAX up 0.2%, CAC 40 up 0.1% and FTSE 100 up 0.3%." 

"The USD consolidated overnight ahead of this week’s FOMC meeting and slew of economic data. With the Fed now firmly hiking and debate over the pace of upcoming hikes intensifying, and the ECB more neutral, the drivers of the liquidity cycle are shifting. That should keep the USD in the box seat against the NZD. However, we do need to acknowledge that the recent USD rally has petered out, which we suspect means we will need to see the commodity complex give way and four-hike sentiment towards the Fed to firm for a downward movement to accelerate again. A reasonable domestic pulse is expected to keep the NZD supported against non-USD crosses."