Morning Update – 05/06/2017 – by Arjun Lakhanpal

Morning all.. Wall St closed up 0.37% after some rather poor US data which missed on expectations but at the same time bond yields slumped to below 2.15% in the 10yr at one point which is rather confusing as the bond move suggests a lack of confidence in the economy as stocks hit all-time highs! In Asia the Nikkei managed the eke out a small gain of 0.14% in a quiet session. USDJPY rallied on the rise in the Nikkei but FX markets stuck in tight ranges. No reaction in GBP to the horrors of Saturday night. London Met Police Chief: confirms 7 members of public killed, 48 injured, 21 critical; vehicle drove into pedestrians on London Bridge, continued to Borough Market; suspects got out of vehicle and stabbed a number of people before attackers were shot dead by armed police. GBP also little moved so far as polls increasing show PM May losing her lead. In Japan we saw the May Markit/Nikkei Serv PMI rises: 53.0 vs 52.2 prev; highest since Aug 2015 which helped the Nikkei rise, whilst in China May Caixin/Markit Services PMI rises: 52.8 vs 51.5 prev (4m high) which helped support AUD.. On the geopolitical front, KCNA: N. Korea fully rejects latest US/UN sanctions; will continue firing missiles and will pursue its nuclear program. US Def Sec Mattis: N. Korea has increased pace of pursuing nuclear weapons; encourage by China’s efforts on de-nuclearisation of Korean peninsula; US will take further steps to protect homeland from N. Korean threat; appreciates development in China but can anticipate economic and political ‘friction’ between US/China; construction and militarisation of artificial islands in S. China sea undermines regional stability. Oil was up 1.6% at one point as Four Arab countries led by Saudi Arabia cut diplomatic ties with Qatar and moved to close off access to the Gulf country, escalating a crisis that started over its relationship with Iran and its support of the Muslim Brotherhood.. This morning we have some Services PMI data across Europe starting with Sweden and finishing in the UK. Good luck..