Morning Update – 16/02/2017 – by Arjun Lakhanpal

Morning all.. Another good day for stocks with the S&P closing up 0.5%, a new record high as global stocks recover to 2015 highs.. US data was strong and yields rose but the dollar fell foul of some very aggressive selling after the data. Asia was more of a mixed bag as the dollar extended losses and US yields slipped. The Nikkei closed down 0.47%. Yellen stuck to the script and some were disappointing that she did not comment on the higher inflation data or signalling March was of greater importance now due to the data.. Fed’s Yellen: Fed coming very close to achieving objectives, monetary policy still accommodative; expect to continue removing accommodation by raising short-term rates; Fed has indicated intent to contract balance sheet substantially but in a non-risky gradual way; does not see significant risk from Fed’s balance sheet holdings; faster economic growth highly desirable if supported by labour force or productivity growth. In Japan BoJ’s Kuroda said low rates may sow the seeds of a new financial crisis; banks profitability could fall further if low-rate environment persists; mergers are one option for banks to increase profitability. AUD Unemployment was better than expected; Australian Jan Employment: +13.5k vs +10k cons; Unemp Rate: 5.7% vs 5.8% cons. The dollar extended its fall against most pairs in Asia as US 10-yr yields moved down to 2.475%. This morning we get nothing of note this morning but we do see ECB minutes. Good luck..