Morning Update – 26/09/2017 – by Arjun Lakhanpal

Morning all.. Wall St finished a nervous session slightly lower with the S&P down 0.22% but tech stocks remained weak with the Nasdaq down 0.88%. FX markets were constrained in tight ranges with USDJPY remaining near the lows. This pressured the Nikkei which closed down 0.33%. The risk off environment after the latest North Korean rhetoric slowed overnight with JPY and CHF easing from their safe haven status; USDJPY still saw some marginal weakening whilst USDCHF strengthened. NZDUSD was the only significant mover overnight as it continued its trend 0.3 lower following unclear election results. In other asset classes Gold and U.S government bonds remained lifted by the risk off environment.  The U.S National Security Advisor claimed the U.S have mapped out four scenarios for how the current crisis in North Korea will be resolved with some of the plans ‘uglier than others’, responding to the statement from North Korea that identified Trumps most recent comments as a declaration of war against North Korea. BoJ Minutes (July 19-20 meeting): many members said companies likely to gradually shift toward raising wages/prices; measures of inflation had stopped declining; BoJ should continue with QQE and YCC; one member said ETF purchases are excessive and will affect px of stocks; few member said jobless rate and output gap need to improve further to reach 2% inflation. In focus today we have a speech from Janet Yellen titled ‘Prospects for growth: reassessing the fundamentals’. This comes after a series of Fed speakers yesterday, including Dudley who signaled for one more hike this year and Evans taking the more careful approach stating that tightening before seeing clear signs of wage and price pressure would be a mistake. This morning we get French Business confidence and UK Mortgage data. Good luck.