Morning Update – 15/09/2017 – by Arjun Lakhanpal

Morning all.. Wall st closed mixed again and close to unchanged as talk of N.K prepping another missile launch smothered the better inflation data from the US. But the markets seem to have launch fatigue now as Asia ignored a missile flying above them and carried on. USDJPY and the Nikkei dropped but quickly rebounded. The Nikkei closing UP 0.57% and the dollar hardly moving. Fx ranges were very tight overnight with no signs of concern over this launch. The UN Security Council is to meet at 8pm London time today to discuss the latest missile test. GBP maintained is rally and traded above 1.3400 again and seems to attract demand on any dip at present. EUR held gains made after some hawkish comments by ECB’s Weidmann: saying QE is an emergency instrument to ward off deflation; deflation threat largely gone; monetary policy to remain exceptionally easy after QE; accommodation should be measured by volume of bonds held, not monthly buys; ECB shouldn’t miss right time to normalize; ECB should ease off accelerator, not brake hard. In the US Treasury Secretary Mnuchin said although we respect the Fed’s independence, we are concerned about economic growth and are doing everything we can (whether its on tax reform, regulatory relief, trade) to create growth; we’re less concerned about inflation at the moment. Dealers rather confused at to what the message was here; is he pushing the Fed for a hike or wants the Fed to keep rates low even if inflation rises? This morning we get no data of note but dealers will be focused on US Retail sales later after the stronger inflation data yesterday.. Good luck