Morning Update – 19/05/16 – by Arjun Lakhanpal

May 19, 2016 by

Morning all.. Wall St held up pretty well considering how hawkish the Fed minutes were. S&P closed unchanged and Asia also had a calm night in stocks with the Nikkei up tiny. But US yields remain elevated and that is holding the dollar up. US 10yr at 1.87% up a couple from NY close. Fed to Markets: June Rate Increase Is on the Table — Update – “Most participants judged that if incoming data were consistent with economic growth picking up in the second quarter, labor market conditions continuing to strengthen and inflation making progress toward the [Fed’s] 2% objective, then it likely would be appropriate for the [Fed] to increase the target range for the federal funds rate in June,” said the minutes. After the release, traders in futures markets put a 34% probability on a move by the June 14-15 meeting, up from just 4% a few days ago. Commodity prices, which are denominated in dollars, may take a hit from a stronger greenback. AUD and CAD both weaker with USDCAD making new recent highs as oil fell.. WTI down 1.25%.. USDJPY clearly broken higher and more buying expected now we are through technical resistance. This morning we get EU Current account data, Norway trade balance and UK Retail sales.. Good luck..