Morning Update – 20/01/2017 – by Arjun Lakhanpal
January 20, 2017Morning all.. Wall St had a quiet session yesterday closing down 0.36%. There was some profit taking seen in the dollar as well but we got little news from Yellen in her speech late last night. The dollar had a round of profit taking it seems. This took USDJPY back below 115.00 but the Nikkei still managed to close up 0.34%. We now wait to hear what trump has to say at 17:00 GMT. Sources say: UK PM met with CEOs from JPM, GS & MS at Davos; talked about implementations periods and current status of decisions making; discussed how moving functions such as trading out of London would also mean moving compliance and support staff; no comment from Downing St. Japan Fin Min: rapid fluctuations are undesirable in FX but will not fret about every up-down move; will stick with plans to achieve budget balance.. Japan PM Advisor Hamada: Japan should not cooperate with Trump on economic policies just to please him, should push back if he takes “wrong” economic policies; Govt should postpone further sales tax hikes if economy stays in deflation; PBOC cut RRR by 1% at 5 largest banks on a temporary basis to ease seasonal liquidity pressure; will restore to normal level at appropriate time after lunar New Year holiday. China Q4 ’16 GDP beat: +6.8% y/y vs +6.7% cons & +1.7% q/q in line; 2016 GDP +6.7% y/y; consumption accounted for 64.6% of 2016 growth. China Dec Retail Sales beat: +10.9% y/y vs +10.7% cons.. This morning we get UK Retail slaes that could impact but the market likely to be nervous about new risk positions in front of Trump speech. Oil holds gains made yesterday and is unchanged from NY close. US 10yr yields were quiet and sit at 2.45%. Good luck.
