Morning Update – 25/05/2017 – by Arjun Lakhanpal

Morning all.. Wall St closed at another record high yesterday with the S&P up 0.25% closing above 2400. This and a rise in oil boosted Asian confidence and stocks with the Nikkei closing up 0.47% and the Hang Seng up almost 1%. FX markets trapped in tight ranges again and the USD a little lower after US yields drifted off in the NY session (last 2.255%). UK: political parties will resume campaigning on Friday following a 3 day suspension after Manchester Arena bombing earlier in week. We had the FOMC minutes:-Prudent to wait for further evidence recent weak data was transitory before raising rates; appropriate to raise rates if expectations met; presented plan to gradually increase b/s limits on reinvestment that would start low, raised every 3 months over set period of time until fully phased in; agreed details of b/s plan should be announced soon, start of reductions appropriate this year; few raised concerns on progress toward the 2% target had slowed. The takeaway was that June is still nailed on for a hike. In Japan BoJ’s Sakurai: recent price and wage growth somewhat disappointing; inflation pressure likely to increase as economic continues moderate expansion; will guide yields to appropriate curve to sustain economic momentum; underlying inflation remains moderate, crucial for BoJ to maintain monetary easing; no change to easing policy of keeping rates low and expanding monetary base.. USDJPY trapped in a 30 pip range most of the night. OPEC meet today and consensus is that they will agree a 9 month extension to production cuts. Oil is up 0.5% as I type. This morning we get Spanish GDP (a final look) and UK GDP data for Q1 and BBA mortgage data.. We also have the RBA’s Debelle speaking in London…Good luck..