Market wrap: Shares drop again, dollar firm, yields elevated in a range - Westpac

Analysts at Westpac noted that US equities fell sharply, the S&P500 down 1%.

Key Quotes:

"Healthcare sector stocks suffered (XLV Healthcare ETF -1.9%) after reports Amazon, Berkshire Hathaway, and J P Morgan would collaborate to provide cheaper healthcare to staff. Currency and interest rate markets were largely unruffled.

US 10yr treasury yields eked an elevated range of 2.68%-2.73%, the latter the highest level since Apr 2014. 2yr treasury yields consolidated between 2.10% and 2.13%. Fed fund futures continued to price the chance of another rate hike in March at 94%. Yellen’s last meeting is Wednesday (6am Thursday AEDT), but there is no press conference and no change in rates is expected.

The US dollar index is unchanged on the day, amid comments by US Treasury Secretary Mnuchin that he didn’t mean to jawbone the dollar lower. EUR is unchanged around 1.2385, having fluctuated between 1.2335 and 1.2454 overnight. USD/JPY dipped to 108.42 before recovering to 108.94. AUD saw increased volatility fluctuating between 0.8043 and 0.8114 but is little changed on the day at 0.8080. Similarly, NZD fluctuated between 0.7280 and 0.7355. AUD/NZD slipped from 1.1050 to 1.1010.

In economic data, US house prices (CoreLogic) rose 0.75% in Nov (vs 0.6% expected), for an annual gain of 6.4% (from 6.3%). Consumer confidence (Conference Board) rose from 123.1 to 125.4 in Jan (vs 123.0 expected). German CPI fell 0.7% in Jan (vs -0.6% expected), for an annual pace of 1.6% (was 1.7% in Dec)."