Morning Update – 23/01/2017 – by Arjun Lakhanpal
January 23, 2017Morning all.. Wall St rallied after the Trump speech to close up 0.9% but Asia and the dollar have since turned lower with the Nikkei down 1.3% as fears over Trumps aggressive stance on NATO and trading partners rise. USDJPY traded lower from the off in Asia and has hit a low of 113.17.. Japan PM Abe: no change in personal view that Trump is a trustworthy leader; wants Trump to recognize Japanese firms’ contribution to US economy. Merkel: Trump has made convictions clear in inauguration speech; will always seek compromise on issues like trade and military spending; will work on preserving US/Europe relationship, should exchange ideas respectfully.. But doubts remain and investors do not like uncertainty. The weaker USD has taken GBP/USD higher as well and Sunday press was upbeat on the UK economy: UK is facing a protracted transition towards more export driven growth this year after a strong end to 2016; falling currency will push inflation to 3.1% by Q4 2017, falling to 2% by end 2018; consumer spending seen slowing to 1.7% in 2017 and 0.4% in 2018 (from 2.8% in 2016) growth will slow to 1.3% this year and 1% in 2018. Sunday Telegraph: Trump will meet May this week; deal to reduce barriers between US/UK banks through a new ‘passporting’ system being considered by Trump administration; ‘working group’ will identify barriers to trade and opportunities for future deals. White House aide: Trump administration will lay groundwork for trade deal between US/UK; two of Trump’s senior advisors met with UK Foreign Secretary on Jan 8 to begin discussions.. Investors closely watching the reactions to the Trump speech this morning and so far the dollar is lower across the board.. No data of note this morning.. Good luck.
