Morning Update – 17/10/2017 – by Arjun Lakhanpal

Morning all.. Wall St had yet another record close with the S&P up 0.18% not a great deal but creeping ever higher and the Nikkei was also up again; closing up another 0.37%. US yields rose and took the dollar higher as Trump suggested that he was impressed with Taylor for the Fed Chair role. Yields in the US out-performed those in Europe which kept the EUR lower whilst USDJPY rallied. US 10 yr yields sit at 2.31%. GBP held up against the EUR after UK PM & EU’s Juncker agreed the pace of Brexit negotiations should be stepped up in coming months; meeting was constructive, friendly; reviewed progress made in A50 negotiations so far…FT: UK PM May is said not to increase €20B offer to EU ahead of a European Council meeting starting on Thursday. Mixed data from Japan with Rtrs Japan Oct Tankan: Mfg Index: +31 vs +25 prev (highest since June ’07); Non-Mfg Index: +30 vs +34 previously. Nikkei: Japan Post Bank will shift several hundred billion yen of its ¥2Tln domestic equities portfolio into mostly large-capitalization stocks..RBA Mins: rate hikes abroad did not have a “mechanical” implication for Australian rates; any rate change would be dependent on domestic economy where data points to subdued inflation and wage pressures; discussed importance of risks in household balance sheets; rise in AUD driven by fall in USD, weighing on domestic inflation; a “material” further rise in AUD would result in slower pick-up in growth/inflation; job gains well above level needed to absorb population growth. Trump: total termination of the Iran nuclear deal very real possibility..NK’s Deputy UN Ambassador(~00.05BST): the situation on Korean peninsula has “reached the touch & go point & a nuclear war may break out at any moment” .. This morning we get UK data dominating with CPI and PPI data released. This could move GBP. We also have EU CPI and German ZEW so a busy morning.. Good luck.