Morning Update – 23/05/2017 – by Arjun Lakhanpal
May 23, 2017Morning all.. Wall St closed up 0.52% as confidence returns to stock investors but Asia markets were rather soft with Nikkei closing down 0.46% after news from Manchester and USDJPY weakened back below 111.00 on the news. The dollar was weak still overnight across the board with EUR holding gains. However, EU Officials: EZ Finance Ministers failed to reach deal on Greek debt relief; decision on Greece’s debt will be postponed as IMF/Germany deadlocked on debt agreement.. ECB’s Weidmann (Hawk): should not postpone decision to normalize monetary policy because of state finances or possible losses for market participants; easy policy still appropriate; if recovery continues, policy normalization will get nearer; domestic price pressures are currently restrained.. Data overnight saw some disappointing data from Japan with Japan May flash PMI: 52.0 vs 52.7 prev (6m low); new export orders fell to 51.6 from 53.3 prev. RBA’s Dept Gov: more comfortable with idea that increase in cross currency basis is not always a sign of market stress; RBA can swap A$ in Yen for domestic liquidity management, can earn substantial return by swapping various reserve currencies it holds in Yen. Oil was down 0.5% in a quiet session overnight as we approach the OPEC meeting Thursday.. US 10yr sits at 2.23% keeping a lid on the dollar.. This morning we get Swedish Unemployment data, EU Manufacturing PMI and German IFO data. We also have borrowing data from the UK.. Good luck..
