Morning Update – 22/02/2017 – by Arjun Lakhanpal

Morning all.. Yet another record high for Wall St with the S&P up another 0.6% but Asia struggled to maintain the euphoria with the Nikkei closing unchanged on the day; probably due to the fact that USDJPY refused to move above 113.80 and is starting to look a little tired again. This lack of a push higher was interesting as the BOJ calmed bond markets with purchases in Long-End. Sovereign bond yields in longer Japanese maturities slipped after BOJ buys medium to long-term bonds, easing fears it may scale back purchases in that sector. The BoJ commitment to manipulating the yield curve continues and usually sees USDJPY rise when it does but nothing last night. The 2yr yield dropped to the lowest in 3 months. AUD holding firm; RBA’s Lowe: low risk of inflation expectations becoming unanchored; reiterates outlook for 3% GDP growth over next 2 yrs with gradual rise in inflation; signs that economy is improving; concerned that wage growth is too slow; sees scope for more infrastructure spending; rise in China PPI is good news; does not see a looming global inflation problem; household debt is high but not unsustainable.. EUR trading through support at 1.0525 and some suggest this suggests a new leg lower for EUR.. Concerns still over the political risks in France, Italy and the Netherlands. China Jan New Home Px: +0.2% m/m vs +0.3% prev & +12.2% y/y vs +12.4% prev; growth rate slowed for 4th consecutive month as demand cooled in biggest cities; px rose in 66 of 70 cities (vs 65 in Dec). Data this morning sees German IFO data, UK GDP and EU CPI.. Good luck..