Morning Update – 18/01/2017 – by Arjun Lakhanpal

Morning all.. Wall St closed down 0.3% as the dollar fell on the back of Trumps comments on the dollar yesterday but Asian stocks have held in with the Nikkei up 0.43% as the Dollar recovered somewhat, even against GBP. Having traded above 1.2415, Cable fell back to hit a low of 1.2328 and USDJPY recovered after a very weak NY session and made a high of 113.37. This seems to have calmed nerves for a while and US 10yr yields are higher too helping support the dollar move; last 2.345%. Theresa May outlined a 12 point plan for UK’s future relationship with the European Union in her speech yesterday. Most of the details had already been reported on, which made it clear that she would be pursuing a hard Brexit and not partial membership of the EU. Regaining immigration control and withdrawing from the jurisdiction of the European Court of Justice are top priorities. It seems the markets saw this as encouraging and GBP remains in danger of reversing recent losses. Fed’s Williams (NV, Hawk): very good case for 3 hikes this year can be made, even without fiscal stimulus; may need to hike faster if economy/inflation accelerates; Fed should start talking about shrinking balance sheet as rates rise. This morning we get UK Unemployment data and EU Construction output and CPI data.. Good luck.