European Opening Session – 23/08/2017 – by Arjun Lakhanpal

Morning all.. Wall St had a very positive day (Boeing helping the Dow rally) with the S&P up 1% and NASDAQ up 1.36% amid a renewed risk on environment. Asia took up the baton with the Nikkei closing up 0.27% but the market is still nervous about Trump statements on NAFTA and sanctions on China and Russia. FX markets had another quiet overnight session with Antipodean currencies and USDCAD the only G10 currencies making movements. USDCAD strengthened by 0.2% whilst AUDUSD weakened 0.2%. NZDUSD was the only currency to make significant movements to the downside (down 0.5%) after the New Zealand treasury released a pre-election economic and fiscal update that cuts 2018 GDP from 3.7% to 3.5%. In other asset classes, Asian equity markets were mixed, trading of the Hang Seng index was suspended due to a severe Typhoon. Crude oil prices retreated from their recovery yesterday with Brent coming off 0.4% trading at $51.70 a barrel. Treasuries sold off, with the Australia note up 2bps and the US 10-year up 1bp. EM also continued to be muted with USDMXN the only significant mover up 0.4% following Trumps comments in Pheonix on Nafta and the U.S./Mexican wall. At a speech in Phoenix President Trump gave his thoughts on Nafta stating “personally I don’t think we can make a deal” and will end up terminating the deal at some point. At the same speech Trump also alluded to allowing the government to shut down if there is no agreement on the U.S./Mexican wall “If we have to close down our government, we’re building that wall,”. Ahead today we have Mario Draghi speaking at Lindau, it is not clear on what Draghi will say though the market will be looking for hints on how the ECB will continue with its asset purchase program. We expect that Draghi will hold off until his Friday luncheon at Jackson Hole if he is to comment at all on monetary policy changes for the ECB. This morning we get a look at French, German and EU PMI data.. Good luck..