Morning Update – 27/02/2017 – by Arjun Lakhanpal
February 27, 2017Morning all.. Wall St closed quietly on Friday with the S&P up 0.15% in a quiet session and it looked like being a quiet start to Asia trading but an article suggesting Scotland may demand another referendum saw GBP weakness overnight. The Nikkei closed down nearly 1% and USDJPY remained nailed to 112.00 having briefly broken below (111.91 the low). Cable traded as low as 1.2391 on the Article in the Times but so far no official comment from the PM’s office. BoE’s Saunders: Brexit will have long-term “modest adverse” impact on UK GDP; lack of credit freeze after Brexit vote likely the main factor behind economic resilience; f/c are always likely to be wrong, BoE tries to present f/c as a probabilistic range. Elsewhere US Tres Sec Mnuchin (FOX): US is not going to get into trade wars, Trump believes in free but fair trade; Trump will be ‘touching on tax reform’ in congress speech; Trump focused on sustainable, long-term growth; will not cut federal benefits programs; Trump concerned on some aspects of border tax, lower tax rate may not mean corresponding revenue drop. BBG Sources: Trump administration could submit budget proposals as early as today; proposing major defence spending & large cuts to Environmental Protection Agency. US yields remain under pressure at 2.33% and oil was higher; up 0.8%. This morning we get no data of note apart from some EU confidence data which rarely impacts. Good luck.
