Morning Update – 20/06/2017 – by Arjun Lakhanpal

Morning all.. Wall St had another record close last night led mainly by the resurgence of tech stocks.. The S&P closed up 0.83% and Nasdaq up 1.42% in a general risk on session. The dollar rallied and the weaker JPY helped the Nikkei to close up 0.92%: Japanese shares climbed to the highest since August 2015. Hawkish comments from Fed’s Dudley allayed concerns about the strength of the world’s largest economy. The dollar held gains as the yen weakened with USDJPY making a high of 11.79 although FX markets were stuck in tight ranges. The yield on 10-year Treasuries was little changed at 2.19 percent, after rising four basis points Monday. Gold was marginally higher but again very tight ranges in Asia. Rating agency Fitch: global growth is strengthening; faster growth this year reflects synchronised improvement across both advanced and EM economies; sees global growth at 2.9% this year, peak at 3.1% in 2018; EZ 2017 growth revised up to 2% from 1.7% previous. GBP remains soft after a quiet Asian session as Brexit talks start. UK/EU Statement: agreed terms of reference for Brexit talks; agree 3 initial negotiating groups for Brexit talks incl Citizens’ Rights, Financial Settlement and other separation issues; provisional dates for Brexit talks in weeks of 17th July, 18th September, 9th October. BoE’s Forbes (BBG interview): BoE underestimating UK inflationary pressures; sees cost to looking through faster infl; CPI pickup in not just temp currency effect; expects wage growth to pick up. UK CBI: raises UK 2017 GDP f/c to +1.6% vs +1.3% and +1.4% vs +1.1% in Nov f/c; change reflects momentum from last year rather than any fundamental change to its view for UK outlook; still expects growth to slow in years ahead as living standards are hit by rising inflation. This morning we get Swedish Unemployment data and little else so a quiet session expected barring headlines again.. Good luck.