Morning Update – 04/05/2017 – by Arjun Lakhanpal

Morning all.. Wall Closed more or less unchanged after the Fed had no surprises for us and remain on a well flagged path. However the NASDAQ did suffer from some profit taking into the close. Japan remains shut due to golden week. FOMC: Vote unanimously to keep rates unchanged as expected; Q1 slowdown in growth likely to be transitory, still expects economy to expand at moderate pace; near term risks to economy appear ‘roughly balanced’;  Fed remains on track for gradual pace of rate hikes; inflation running close to target; repeats will reinvest principal payments of holdings until rate normalization well underway; no new language on balance sheet policy. EUR in a tight range still after the TV face-off between Macron and le Pen. Elabe snap poll: 63% of those surveyed found Macron more convincing than Le Pen in TV debate yesterday; poll also found Macron most convincing for 2/3rds of 1st round Melenchon-voters and 58% of Fillon-voters; debate lasted 2.5hrs; viewed as ill-tempered, aggressive debate with candidates offering diametrically opposed visions of France. USD a little higher also on the fact that US House Rules Committee approved Republican healthcare bill for vote by full House on today.-Politico (cites multiple Republican sources): US House will vote on Thursday on Republican Obamacare repeal and replacement bill; GOP leaders confident they have enough support but acknowledge vote will be close. Meanwhile in Asia we had some disappointing data from China with China April Caixin Services PMI at 51.5 vs 52.2 prev (slowest expansion in ~1yr). In Australia we had RBA’s Lowe: could expect interest rates to rise over time in Australia, rates should not always be this low; expects economic growth to pick up gradually, avg ~3% or so over next few yrs; recent increase in household debt to income has made economy less resilient to future shocks; employment growth has been bit stronger recently, fwd looking indicators are positive; concerned about impact of sharp house px correction on housing spending and economy; Australian banks are resilient and well capitalized. This morning we get Services PMI across Europe and the UK along with Retail sales for the EU.  Good Luck.