Morning Update – 28/02/2017 – by Arjun Lakhanpal
February 28, 2017Morning all.. The Dow, after a late rally in a quiet session managed to make yet another record high, closing up marginally on the day. But it is clear markets are now on hold waiting to hear what Trump has to say tonight. he has mentioned this budget will target home security and a boost to military spending and it was this sector that pushed stocks higher. The dollar remained subdued even with a small rise in yields. Fed’s Kaplan (Voter, Leaning Hawk): Fed may need to raise interest rates in the near future to avoid falling behind the curve on inflation; raising rates a few times this year would leave monetary stance accommodative; rate hike should be sooner than later; should start removing accommodation, must do slowly; can go little deeper in reducing jobless rate before creating price pressure; confident 2017 economic growth will be >2%; monetary policy is highly accommodative.. GBP remains a little weak after the Scottish referendum story. UK GfK Feb Consumer Conf: -6 vs -5 prev; any momentum behind post Brexit spending boom was debt fuelled, and now appears to be softening. EUR remains anchored at 1.0600 and had a tight range over night. USDJPY consolidating over 112.00. BoJ’s Kuroda: BoJ will continue to pursue powerful monetary easing policy under current framework; long-term rates may rise if economy improves and accelerates inflation to 2%; BoJ’s YCC will make sure yields will remain at levels that reflect improvements in economy/px. All rather quiet.. Data this morning sees CPI from France and Italy, along with GDP and consumer spending from France..We have a full calendar of data from the US. good luck.
