Morning Update – 09/03/2017 – by Arjun Lakhanpal

Morning all.. Wall Street fell again in a quiet session with the S&P down 0.23% but Asia managed to stay in the green even after the steep fall in oil through the NY session and probably helped by the rally in USDJPY. The Nikkei finished up 0.34%. The Dollar was pretty quiet but generally firm as US yields, whist off the highs, held solid gains. Scotland 1st Min Sturgeon: Autumn 2018 would be a logical date for any second independence referendum; no final decision has been made on holding such a vote but GBP holding in a tight overnight range. After the extremely strong ADP data from the US yesterday, banks are raising forecasts for NFP data on Friday. Data overnight showed China Feb CPI miss: -0.2% m/m vs +0.6% cons & +0.8% y/y vs +1.7% cons; Food CPI: -4.3% y/y, Non-Food 2.2% y/y; slowest y/y pace since Jan 2015 with China stats office citing Lunar NY distortions. China Feb PPI: +0.6% m/m & +7.8% y/y vs +7.7% cons; fastest y/y pace since Sept 2008 due to increasing industrial commodity prices and this may suggest China will be exporting more inflation. This morning we get French business sentiment and little else but of course we have the ECB meeting and the Draghi press conference. Consensus seems to be for no change in key ECB interest rates or to the APP. For the staff projections during the subsequent press conference, some expect the ECB to revise its headline inflation forecast for 2017 to +1.6% (from +1.3%) owing to higher energy and food prices. Further out the curve, they expect the headline inflation forecast for 2019 to be unchanged at 1.7%. Good luck..