Morning Update – 16/08/2017 – by Arjun Lakhanpal
August 16, 2017Morning all.. Wall St had a very subdued session after what was seen as strong retail sales data with Wall St closing close to unchanged across the board. It was the same in Asia which had a very quiet session with the Nikkei closing unchanged also, as we wait for the FOMC (Fed) minutes tonight. In FX we saw the USD hold on to gains after strong US retail sales data reinforced the probability of a rate hike happening before the year is out. Safe haven assets continued their retreat as North Korean tensions recede with JPY flat from yesterday, CHF edging lower to 0.9734 per USD and US 10-year treasury yields up 4.7bps. GBP was slightly weaker against the USD reaching a 5-week low after falling on weaker-than-expected inflation data earlier in the day. Ranges in Asia were tight. President Trump is still embroiled with the aftermath of the white supremacy rallies over the weekend as he attempted to lay blame for the violence on both parties. The Fed minutes will be in focus this evening where the market will be looking out for whether inflation data will alter the suspected trajectory of monetary policy for the Fed. Dallas Fed president Kaplan came out overnight to say inflation means policy makers can be patient on interest rate and balance sheet reduction can start ‘very soon’. Data this morning sees Italian GDP data, UK Unemployment and earnings data and EU GDP data. Looks like being a quiet one until the release of the Fed minutes later tonight..Good luck…
