Morning Update – 18/02/16 – by Arjun Lakhanpal

Morning all.. Wall St had another strong session closing up 1.65% after some better data and a mildly dovish FOMC minutes. Asia continued the theme with the Nikkei closing up 2.28% and HK was up 2.25%.. China unchanged though..The S&P 500 (+1.65%) completed its first 3-day gain of the year yesterday, WTI Oil (+5.58%) is now 20% off the lows and at levels first breached on the downside on January 11th. In China we saw the January inflation numbers released this morning. CPI was reported as rising +0.5% mom last month having been driven by a surge in food prices with non-food prices relatively stable. It’s worth warning that food prices tend to be subject to bouts of volatility and seasonality though. However, as a result that’s seen the YoY rate lift two-tenths to +1.8% although slightly less than the +1.9% expected by the market. Yesterday saw the release of the FOMC minutes from the January policy meeting. While still a big focus, Yellen’s recent comments at her Semi-Annual Testimony meant a lot of the text was already pre-flagged. Overall the message pointed towards one of the Fed still being in a wait and see mode, keeping options open but with clear uncertainty around the outlook. . Attention was centered on the Iran meeting where we had confirmation (WSJ) from the Iranian Oil Minister that they would support a plan from Saudi Arabia and Russia to curb production at January levels. That being said it still feels like there is a lot of noise around this with Iran not actually committing to anything specifically and with little obvious signal that they will be taking part in the production freeze. USDJPY topped out at 114.50 and has struggled since even with higher stocks.. EUR unchanged but some concerns over Cable again as we may hear if Cameron got his deal today. AUD fell on weaker unemployment data. This morning we get CPI from France Sweden and ECB current account data.. good luck..