Morning Update – 08/09/2016 – by Arjun Lakhanpal

Morning all.. Wall St closed almost unchanged after a muted session evn though oil rallied strongly. The Nikkei was weaker after better GDP data saw USDJPY fall..Japan Q2 final GDP beat: 0.2% q/q vs 0.0% consensus; GDP deflator: 0.7% y/y vs 0.8% consensus..USDJPY bounced later as BoJ’s Nakaso said BoJ should continue with easing, following QQE with negative rates as most appropriate policy; need monetary policy & supply side reforms working together; policy review is looking at how to get to inflation target ASAP; no plan to abandon 2% price target; should not rule out further rate cuts; must balance effects of policy with impact on the banks; inflation target has not yet been reached due to low oil & weaker demand after sales tax hike; reducing level of accommodation will not be on agenda in September; further measures may be necessary but depends on developments in economy & price; BoJ is able to normalise policy..The USD resilience the theme of the day…USD reverses early losses and holds ground vs Em and majors in line with the retracement higher in USD rates. Crude oil ~ 3.5% higher as inventories showed a large draw. Fed’s Beige Book found modest growth in most districts and slight inflation pressure plus tight labor conditions in some districts.. Market focus shifts toward ECB meeting and Draghi press conference today; no change expected in rates or policies, some expect ECB may signal extension of current QE program beyond March 2017. This morning we get French Business sentiment and Swedish Household consumption.. All overshadowed by the Draghi press conference. Good luck..