Morning Update – 19/05/2017 – by Arjun Lakhanpal

Morning all.. Wall St bounced with the S&P closing up 0.37% as Comey suggested he was told to drop an investigation into Russian contacts with Trump but markets remain nervous into his testimony next week. In Asia the Nikkei was up 0.37% on the back of the bounce on Wall St and USDJPY but again the rally in both is rather shallow. GBP is recovering after a mini “flash crash” yesterday on no news. Overnight Moody’s on UK: Despite signs of slowing growth in Q1, the UK’s macro-economic conditions remain firm; relatively resilient macroeconomic conditions post Brexit vote support their f/c of modest & manageable credit impact; likely to see consumption growth weaken this yr amid rising inflation. Interestingly the EUR is holding gains against the dollar and other crosses.USDJPY ran into Japanese sellers above 111.50. Treasury’s Mnuchin (at Chamber of Commerce event): still hopeful will get tax reform done this year; border adjusted tax proposal doesn’t work in current form; administration working on infrastructure investment plan now; has had discussions with UK on bilateral trade deal. Brazil President: will not resign; waiting to hear recordings of all allegations against him; will prove innocence at supreme court.. Oil was higher overnight with WTI up 0.75% and US 10yr yield remains at 2.235%.. Very little data today in Europe or the US so traders watching how yields and stocks finish the week. Good luck..