Morning Update – 14/08/2017 – by Arjun Lakhanpal

Morning all.. Wall St closed higher on Friday as US inflation data disappointed, suggesting the Fed may not be able to hike as expected.. S&P closed up just 0.13% though as investors were wary of holding risk over the weekend in case comments or actions came from N. Korea. A muted overnight session in FX with most currencies trading in range against the USD. JPY was the biggest mover, weakening slightly down 0.3% against the USD after Japan reported stronger than expected Q2 preliminary GDP, with annualised GDP rising at its fastest pace since Q1-2015 up 4% year of year vs 2.5% expected. USD 10yr treasury yields rose by 1bp to 2.208% rising off a 6 week low last week. Brent crude prices traded down 0.2% at $52.02 a barrel which gold remains near 9-week highs trading at 1,286.39. In EM, China’s July industrial production came in lower than expected at 6.4% vs 7.1% expected, retail sales were also slightly weaker at 10.4%. This weak China data weighed on AUD which trades on session lows.. In the news, top aides to Donald Trump have sought to placate China, insisting the country is vital to resolving the nuclear crisis over North Korea’s nuclear program, even as the administration prepares its first direct trade attack on Beijing.  Mr Trump is expected to sign a presidential memorandum on Monday asking his top trade negotiator to examine launching an investigation into China’s intellectual property regime. The step could lead to US tariffs and other restrictions on Chinese imports within a year in what many see as the potential first step towards a trade war between the world’s two largest economies. This morning we get very little data but we do have EU Industrial Production data. Calmer markets expected today…Good luck…