Morning Update – 14/03/2017 – by Arjun Lakhanpal

Morning all.. A quiet session on Wall St that saw stocks close around unchanged on the day as we wait for the Fed decision on Wednesday.. The Nikkei closed down slightly in another quiet session. The dollar struggled most of the day yesterday even as yields rose but has made some gains through the Asian session as US yields remained above 2.62%. USDJPY rallied back through 115.00 as many fully expect the Fed to hike this week. GBP the main mover and under-performer versus the USD amongst a relatively quiet session ahead of key risk events later in the week. The catalyst for GBPUSD down ~80bps is predominantly the market’s expectation for the possible trigger of Article 50 today (Brexit bill was moved to the Queen after House of Lords withdrew the amendment requiring a “meaningful” parliamentary vote). Although the negative impact of a possible Scottish referendum is also on the horizon, this takes a back seat for the time being, with PM May likely to reject the request for now (at least timing-wise). Elsewhere in G10 space, USD posted gains across the board with AUD the second largest under-performer versus the greenback. Australia’s NAB business conditions hit a 3-month low after printing a 9-year high last month. NAB noted it is more concerned about the longer term picture as contributions from LNG exports and construction activity fade, forecasting another RBA rate cut this year. Economic activity data from China were the key risk events for the NJA area, coming in mixed. Retail sales growth disappointed with a multi-year low of 9.5%, despite recent comments from Beijing that economy is making progress in transition to consumption-driven growth. Industrial output rise hit a 6-month high however, with 6.3% increase in power generation, 5.8% rise in crude steel production, and 8% decline in crude oil output. Not much data this morning but the focus on German ZEW and EU IP data. Good luck..