Morning Update – 21/02/2017 – by Arjun Lakhanpal

February 21, 2017 by

Morning all.. Wall St was closed yesterday but Asia has taken stocks higher with the Nikkei closing up 0.68% on the back of stronger data and a rising USDJPY. Japan Feb prelim Mfg PMI came in at an impressive 53.5 vs 52.7 prev; highest level in 35 months, above 50-threshold for 6th consecutive month and this took the Nikkei higher and USDJPY based out and made a high of 113.71 at one point.. Profit taking has kicked in taking us off the highs but remains above yesterdays high. BoJ’s Kuroda: reiterates appropriate to continue current easing given distance to inflation target; interest rate levels are rising globally; too early to raise BoJ interest rate targets; monetary policy not targeting FX rates. Elsewhere the RBA Minutes were broadly optimistic: med term inflation expectations we anchored, inflation will rise gradually; downward pressure on inflation could be more persistent than assumed; repeats appreciating AUD would complicate economic transition; board members more positive about near term prospects for global economy and more confident that China growth will stay resilient this year but sees risks over medium-term; significant downside risks to global growth if Trump pursues restrictive US trade policy. AUD remained in a tight range. US yields were little changed and oil was up about 0.5%. This morning the focus will be back on Europe and the EUR is lower overnight trading down to 1.0576 as fears grow over the political risks as elections draw near. We have CPI data for France and PMI data for France, Germany and the EU this morning.. We also have Public borrowing data from the UK. Good luck.