Morning Update – 08/05/2017 – by Arjun Lakhanpal

May 8, 2017 by

Morning all.. Wall St closed quiet but firmer on Friday in front of the French election which macron won with some ease calming nerves across the global asset markets. The Nikkei was up 2.46% on this and had some catching up to do after being off for 3 days for Golden week. EUR rallied on the news and reached above 1.1000 but failed to hold gains as the result was very much as expected. The high was 1.1024..GBP holding gains against the dollar but a tight range overnight and USDJPY remains bid against the dollar but still below 113.000. UK Home Secretary (BBC Radio) EU Pres held very hostile briefings against PM after 26 April dinner in deliberate attempt to influence voters; hinted that Conservatives will rewrite previous pledges on reducing migration when publishing manifesto & warned that UK must hire more British workers as companies will not be able to rely on EU workers after Brexit. Visa: UK April Consumer Spending +0.5% y/y vs +1.0% prev; higher infl and weak wage growth squeezing household disposable income; one of slowest rates of growth in last 3 years & f/c to remain weak in coming months-(Fri PM) Fitch affirms UK at AA, outlook negative. ICM/Sun poll: Cons 18 point lead over Lab; Conservatives 46% (-1), Labour 28% (-). In Asia, Japan MoF Asakawa: Chinese economic slowdown is a major risk; regional safety net helped Asean +3 in 2008, safety net helped limit impact of fin crisis. BoJ’s Kuroda: inflation rate still close to zero; critical to achieve 2% infl in stable manner to gain policy room for future; economic activity/px conditions have improved but infl tgt still to be achieved; will continue to pursue strong monetary accommodation; JPY depreciation affecting corp profits more than trade balance; mon pol one of several factors affecting capital flows. China Apr Trade Surplus: $38.05bn vs $35.5bn cons; Imports +11.9% y/y vs +18.0% cons; Exports +8.0% y/y vs +10.0% cons; Trade Surplus with US: $21.34bn vs $17.74bn in March. Very little data this morning with UK house price from Halifax.