Morning Update – 10/05/2017 – by Arjun Lakhanpal
May 10, 2017Morning all.. Wall St struggled to hold record gains but in another quiet session, closed marginally lower on the day. Asia had a better session with a rise of 0.35% in the Nikkei and Chinese stocks unchanged. It was a quiet night but the USD fell on news that Trump had dramatically fired the head of the FBI. EUR holding around 1.0900 after -(~18:00bst) German Fin Min: interest rates will begin to normalize soon, you can assume that based on recent remarks of the ECB; will do what we can to help Macron strengthen EU, monetary union; reiterates support for sustainable German financial policy without new Govt debts; Germany can be a bit more flexible on budget once debt has dropped to 60% of GDP. USDJPY nudged lower on a broadly lower dollar. BoJ’s Kuroda: important to patiently continue current powerful monetary easing; YCC is main focus of BoJ mon pol, JGB purchase amount and monetary base are merely guidelines; not thinking right now about how to change BoJ policy mix, too early to talk about exit policy strategy; impossible for BoJ to continue buying JGBs once CPI reaches px tgt and shows continuous gains; economic recovery has taken hold more firmly; no comments on desirable FX level.. In Chin, Apr CPI beat: 0.1% m/m vs 0.0% cons & 1.2% y/y vs 1.1% cons; Food CPI -3.5% y/y, Non-Food +2.4% y/y-China Apr PPI: 6.4% y/y vs 6.9% cons & -0.4% m/m. Elsewhere oil rallied in NY as API inventories fell more than expected but WTI is unchanged in Asia after the rally in NY. US 10yr yield sits at 2.385%. Not much in the way of data this morning in Europe, we get French Trade balance and Industrial production and that’s about it.. Good luck.
