Morning Update – 11/10/16 – by Arjun Lakhanpal

Morning all.. Wall St closed up nearly 0.5% as oil soared on reports that Russia is willing to join in a freeze in oil output. Asian stocks a bit mixed but the Nikkei up 1% buoyed by a weaker JPY.. USD showed strength across the board overnight with the Antipodean currencies the largest under-performers – NZD down ~85bps and AUD down ~65bps. NZD in particular sold off as RBNZ Assistant Governor McDermott gave a very brief speech where he leant on his established dovish stance: “current projections and assumptions indicate that further policy easing will be required to ensure that future inflation settles near the middle of the target range”. GBP the next under-performer in line, down ~60bps, post a leak of the UK Treasury report which suggests the UK economy could lose 35-66bn GBP per year under ‘Hard Brexit’. Chicago’s Fed Charles Evans was on the wires outlining fears Fed policy will over-stimulate the economy are exaggerated. He has “yet to see clear and convincing” signs that inflation is returning to the 2% goal, which would make support for a rate increase an “easy” decision. USDJPY settled up ~25bps, just above the 104.00 level, despite the stronger-than-expected Japan trade surplus. EUR sold off marginally ahead of the key data print to be released in Germany’s ZEW survey later this morning. As well as the ZEW we get CPI from Sweden.. Good luck..