Morning Update – 12/09/2017 – by Arjun Lakhanpal

Morning all.. Wall st and global stocks had a very strong recovery for many reasons including the weakening of Irma and a rising USDCNY. S&P closed up 1% and the Dow up 1.19%. Asia followed and the Nikkei, helped by a strong rally in USDJPY in the US session, rose 1.09%. Fx markets were rather range-bound but dollar strength remained. As Europe walks in NZDUSD is the biggest mover surging after grinding 0.5% lower and trading at the day’s low of 0.7222.  New election polls at 7am today showed the party in power extending its lead.  Safe haven assets continue to lose their lustre as the market shifts to a risk-on environment, gold fell from recent highs of $1,348 trading to $1,323 per ounce. Brent crude retreated a further 0.2% to $53.74 a barrel. Government bonds sold off, the Australian 10-year was up 3bps and JGBs up 4bps however the US 10-year was flat vs yesterday. The PBOC weakened the CNY reference rate to 6.5277 a 0.4% lower than yesterday’s fix and its lowest since January. The UN voted unanimously for increased sanctions against North Korea. The sanctions approved are softer than the U.S’s initial proposal in order to have China and Russia on board, but will ban all textile exports and cut imports of refined petroleum to 2 million barrels a year. In the news, UK law makers voted 326-290 against the labour party’s attempt to block the EU withdrawal bill but little impact on GBP as this was fully expected.. Interestingly 7 Labour MPs rebelled against their party to back Govt; the bill now moves onto next stage where it will face more scrutiny and possibly new amendments. This morning the focus will be on UK data with CPI dominating. This is very likely to have an impact as we have a BoE meeting Thursday.. Good luck..