Morning Update – 22/05/2017 – by Arjun Lakhanpal

Morning all.. Wall ST had a very positive close on Friday and calmed nerves after a wobble earlier in the week. The S&P closing up 0.68% on the day and is up 1.4% on the month still. It was a similar story in Asia with the Nikkei rising 0.44% helped by a solid bounce in USDJPY on Friday which held through Asia. However FX markets were in tight ranges mostly but USDJPY seeing a 110.99 -111.62 range. EUR was stuck hovering around 1.1200 through the session. GBP/USD managed to rally back above 1.3000 but is struggling to make further gains. Some of the gains coming from UK Rightmove May House Price index: +3% y/y vs 2% cons, +1.2% m/m vs 1.1% consensus. However a Survation poll- Prime Minister Theresa May’s Conservatives’ lead over the opposition Labour Party halved to 9 percent in a Survation telephone poll published on Monday, adding to signs that the election race is tightening ahead of the June 8 vote. Plus UK May CBI Factory Orderbook: +9 vs +4 prev; factory orders growing at fastest pace since Feb 2015 but facing mounting cost pressures and expectations for factory-gate prices to rise. However some early weakness was seen as UK Brexit Min (Sun Times):  said “no deal” with EU threat is genuine, Britain is prepared to see it through; we don’t need to just look like we can walk away, we need to be able to walk away; still thinks an agreement is most likely outcome. This poll also a concern early in the session.. YouGov/Times: Conservatives 44% (-5), Labour 35% (+4). -(Saturday) Saudi Energy Min (BBG TV): thinks all oil producers in agreement to extend crude output cuts by nine months; everyone I’ve talked to indicates 9m is a wise decision; OPEC decision has to made by consensus. (OPEC meeting starts Thursday). Oil is little changed as I write with WTI down 0.23%. South Korea’s military has stated that North Korea has fired a projectile of an “unspecified type”. Japan PM Abe: want to raise issue of N. Korea missile launches at G7 Summit. US 10yr yield sits at 2.255% as Europe walks in.. No data of note this morning..