Morning Update – 13/02/2017 – by Arjun Lakhanpal
February 13, 2017Morning all.. Wall St finished higher on Friday making new record highs at one point and the dollar bounced. There were no fireworks from the Trump/Abe meeting and no comments over the weekend to worry the markets. On that basis we have seen stocks in Asia rise further with the Nikkei up another 0.44% and USDJPY traded briefly above 114.00. The dollar falling since as US yields failed to rise. 10yr now 2.418%. But IMM futures data suggests investors have cut a lot of USD longs and many have some decisions to make with Yellen speaking Tuesday; do they wait to get back in? EUR remains near recent lows and French Fin Min (Handelsblatt): sees danger of strengthening nationalism in Europe; defends Germany against Trump claims of abusing trade partners with weak euro but Germany should be more ambitious with investments.. Le Pen says cars made overseas by French companies & sold in France should be taxed; didn’t quote tax rate she’d impose but referenced US Pres Trump’s threat to tax imported cars 35%. IMF’s Lagarde: concerned about result of upcoming elections in France/Netherlands/Germany; Eurozone making progress in resolving economic problems but there is more work to be done; watching Trump plans closely; reason to be optimistic about US economic growth, could be boosted by tax reforms and infrastructure spending, worrying news is possible impact on rest of the world. Data wise Japan Q4 GDP: +0.2% q/q vs +0.3% cons & +1.0% y/y vs +1.1% cons; private consumption stopped rising for 1st time in four quarters; external demand +0.2% vs +0.3% cons, domestic demand flat; 4th consecutive quarter of expansion, exports best since Q4 2014. We have no data of note today.. Good luck
