Market wrap: strong equities, dollar higher - Westpac

Analysts at Westpac offered a market wrap noting the disappointing nonfarm payrolls report.

Key Quotes:

"Global market sentiment: US equities rose to fresh record highs on Friday, the S&P500 up 0.7% to extend a strong run so far this month. That may have helped bond yields rise, despite a disappointing US jobs report.

Interest rates: US 10yr treasury yields initially fell from 2.46% to 2.43% in response to the payrolls data, but later rose to 2.48% - near the upper end of its three-month range. Traded inflation rose to a 10-month high, 10yr TIPS implying an inflation rate of 2.04%.

The short-end was steady, apart from a brief blip post-payrolls, 2yr treasury yields sitting around 1.96% which is close to the 10-year high of 1.97% made on Thursday. Fed fund futures priced the chance of another rate hike in March at 68%.

Currencies: The US dollar index closed Friday up 0.1% but remained near the bottom of its three-month range. Underperformer EUR fell from 1.2080 to 1.2021 but remained near its multi-year high. USD/JPY rose from 112.80 to 113.31. AUD rose from 0.7840 to 0.7875 – a three-month high. NZD rose from 0.7145 to 0.7187 – a three-month high. AUD/NZD extended a two-day decline to 1.0946 before recovering to 1.0980."