Morning Update – 11/05/2017 – by Arjun Lakhanpal

Morning all.. Wall St finished mixed with the Dow a little lower and the S&P closing up 0.11% in what was a quiet session again. US yields and a rise in oil kept the USD bid overnight after a better close in NY. US Treasury Official: Mnuchin will discuss Trump admin’s tax reform, regulatory reduction efforts at G7; will discuss sanctions issues related to Russia, Iran; trade issues not part of G7 agenda, likely discussed in bilateral meetings, G7 economic discussions will focus on improved growth prospects & risks including China. GBP remains well supported into the “Super Thursday” where we get the BoE rate decision, growth and inflation forecasts and a vote on the decision. UK April RICS house px balance higher than exp: 22 vs 20 cons (unchged from Mar); balance for the next 3m’s falls 4 vs 11 prior. The biggest mover was Kiwi which fell on the back of comments at the RBNZ meeting. RBNZ rate decision: unchged (as exp) 1.75%: Monetary policy will remain accommodative for a considerable period; developments since Feb are considered neutral in regards to monetary policy; headline inflation to reach to midpoint of their tgt band over the medium term; growth remains positive-RBNZ Gov Wheeler: haven’t seen an acceleration of wage inflation; lack of inflation pressure is the main reason for keeping neutral stance-RBNZ McDermott (Ast Gov): RBNZ sees as much chance of a rate cut as a hike; mkts are ignoring downside risks; RBNZ wants to see core infl rise to 2%; 2y infl expectation measure is unreliable. AUDNZD rallied almost 150 pips to a 1.0758 high and the cross is now hovering around 1.0745. Other meaningful news came from Canada, with Moody’s downgrading Baseline Credit Assessments (BCAs), the long-term ratings and the Counterparty Risk Assessments (CRAs) of six banks on concern over-indebted consumers and high housing prices have left lenders vulnerable to potential losses on assets.: The main event this morning is the BoE meeting but we also have Swedish CPI data and UK Industrial production, Trade balance and Construction output data. Good luck