Morning Update – 31/03/2017 – by Arjun Lakhanpal
March 31, 2017Morning all.. Wall St finished the session up 0.29% after better readings in US GDP and other data. However whilst that took stocks and the Dollar higher, the Nikkei failed to rally again closing down 0.59% and the correlation between the two seems to be breaking. US yields also helped drive the dollar higher and the 10yr US yield sits at 2.41% but oil is lower this morning; down 0.35%.. EUR lower as Fed speakers talk up rates whilst ECB members play down tapering so the divergence of policy trade is back on. EU’s Tusk: expected to issue Brexit negotiation guidelines at 08:45bst on Friday; will reflect EU27 previous insistence on balance of rights and obligations.. GBP was in a tight range. UK March GfK Cons Conf: -6 vs -7 cons.. UK Mar Lloyds Biz Barometer: 35 vs 40 prev; consumers remain cagey about state of personal finances & general UK economic picture, especially as wage growth is failing to keep pace with rising living costs.. Fed’s Kaplan (V, Hawk): 3 hikes in 2017 is a good base case, path of rate hike increase should be gradual and patient; could be more than 3 hike this year depending on how economy unfolds; f/c’s 2017 GDP of 2.25% (said the same on Mar 27th).. There is chatter that the global reflation theme is back in play and China data was positive. China Mar Manufacturing PMI: 51.8 vs 51.6 cons with China Mar Services PMI: 55.1 vs 54.2 prev.. Japan Feb core N’wide CPI: +0.2% y/y in line; Overall N’wide CPI: +0.3% vs +0.4% prev.. This morning we get French and Italian CPI, German unemployment and UK GDP. Good luck
