Morning Update – 06/09/2017 – by Arjun Lakhanpal

Morning all.. Wall St had a wobble after tensions rose in N. Korea and Trump was talking trade sanctions on China; a major supplier of food and oil to NK. The S&P closed down 0.76%, the Dow down 1% and NASDAQ down 0.93% so broad losses. Asia had a much quieter night with the Nikkei closing down just marginally as no new news came from the Korean peninsula. However USDJPY struggled to rally but Currencies stabilised after some USD weakening following comments from Fed officials urging caution on tightening policy concerned the markets that the fed might not hike again this year. The Minneapolis Fed President argued the rate increases may actually ‘be doing real harm to the economy’ and leading to slower job growth. Robert Kaplan, Fed President of Dallas said he could advocate for another hike this year but wants to see how inflation plays out, he’s aware of hurricane Harvey’s impact on Q3 growth but states it will not change his view on monetary policy. The DXY dropped 0.4% on the dovish comments but has since retraced. JPY continued to firm up against the USD for a third day in a row, enjoying its safe haven status as nervousness remains around North Korea’s nuclear regime. AUDUSD slumped after Q2 GDP data came out to show a 0.8% rise, just under market expectations. Equities, futures and treasuries slid overnight on the back of the comments from the Fed officials. In the news, the U.K. Plans to end free movement of labour immediately after Brexit. Britain will also lay out restrictions to only encourage highly-skilled EU workers to its borders. Data this morning sees Swedish Industrial Production and little else.. Could be a quieter day barring headlines.. Good luck.