Market wrap: US stocks rose for a third straight session - Westpac

Analysts at Westpac explained that US stocks rose for a third straight session on an upbeat day for global risk assets.

Key Quotes:

"US 10yr treasury yields rose from 2.84% to 2.86%, and 2yr yields rose from 2.55% to 2.57%. Fed fund futures yields continued to price 1 ½ more hikes in 2018.

Asia’s strong equity gains were matched in Europe and then in the US where the S&P 500 posted a third consecutive healthy gain to a one-month high. The data calendar was largely empty.

The equity rally included the FTSE 100, which rose 0.9%. But the pound was very lively, watching UK political headlines. The resignation of Brexit secretary David Davis was brushed aside as GBP/USD reached a high of 1.3363 in the London morning, its strongest point since 14 June (ECB meeting day). But the resignation of foreign secretary Boris Johnson caught sterling traders off guard, GBP/USD sliding from around 1.3350 to 1.3260 and a later low of 1.3190 before pushing back to 1.3255, for a net change of just -0.2%.

PM Theresa May is swiftly replacing the Cabinet positions. The next 48 hours will prove critical in determining whether there might be a leadership challenge. The best outcome for GBP is presumably May sticking with her relatively business-friendly Brexit plan and fending off any challengers.

EUR/USD is flat over the day around 1.1750, a rally to 1.1790 fizzling out. USD/JPY rose from 110.40 to 110.90, the defensive yen the worst performer of the day.

AUD was strongest in the G10, with help in Asian trade from the sharp rise in the Chinese yuan (CNH was best in Asia, up 0.6%). The Aussie rose 0.5c from early Sydney to 0.7484 in NY, then eased back to 0.7465. NZD/USD was little changed around 0.6840. AUD/NZD rose 0.3% over the day to 1.0915.

Emerging markets were generally upbeat too, though the Turkish lira slumped -3.5% after President Erdogan announced his son-in-law as treasury and finance minister."