Morning Update – 27/05/16 – by Arjun Lakhanpal

Morning all.. Wall St closed more or less unchanged in a rather quiet session even though oil traded above $50 but stocks fell as  oil gave up gains and settled lower. Asia staged a rally abeit muted with the Nikkei up 0.36% which was not bad considering oil kept falling. WTI is down o.7% at $49.13. USDJPY rallied early in the session on Abe sources comments.. Japanese Prime Minister Shinzo Abe will delay a national sales tax increase, originally planned in April 2017, due to concern the move could tip the economy back into deflation, government sources told Reuters on Friday. However USDJPY has since given up nearly all the gains. Japan’s core consumer prices fell for the second straight month in April as weak consumption discouraged firms from raising prices, stoking fears of deflation and keeping the central bank under pressure to do more to hit its ambitious inflation target…The nationwide core consumer price index (CPI), which includes energy but excludes volatile fresh food costs, fell 0.3 percent in April from a year earlier, matching the drop in March which was the biggest annual decline in three years. In a sign price falls will persist, core consumer prices in the Tokyo area – a leading indicator of nationwide tendencies – fell 0.5 percent in May..Fitch has warned Australia’s major banks are facing increased risks and bad debts, with one of the agency’s analysts declining to call them “safe and solid”. AUD was trapped in a tight range though. This morning we get French Consumer confidence, Spanish & Swedish Retail Sales.. The main event is Yellen speaking after the London close so markets may be quieter today in front of the long weekend in the UK and US.. Good luck..