Morning Update – 20/09/2017 – by Arjun Lakhanpal

Morning all.. Wall St climbed to new record highs again in the Dow and the S&P closed up 0.11% in what was a very quiet session again as we wait for the Fed. The Nikkei was also close to unchanged with many waiting for the FOMC meeting tonight where Yellen is expected to announce the start of balance sheet reduction (tapering of bond purchases). G10 currencies were firmer against the USD but price action was muted ahead of this evenings Fed meeting. USDJPY weakened 0.15% after Japan’s trade balance for august showed that exports to the US were up 21.8% YoY and headline exports had its 9th consecutive rise. In other asset classes equities were weaker overnight and treasuries sold off. Gold clawed back from its most recent retreat, gaining 0.1% trading up to $1,313.08 per ounce after President Trumps rhetoric to the UN. In EM, President Trump vowed to destroy North Korea if necessary during a meeting with the UN yesterday, his strongest threat towards North Korea yet. CNH weakened 0.25% continuing its retreat from a 21-month high of 6.4349 two weeks ago, USDCNY fixed 140 pips higher at 6.5670. Natural disasters dominated the news last night as hurricane Maria made landfall in Puerto Rico overnight after destroying the Dominican where it strengthened to a category 5 hurricane. In Mexico, a catastrophic 7.2 magnitude earthquake struck near Mexico City shattering buildings in 44 places around the capital, the current death toll is at 149 people where it is expected to increase. This morning we get UK Retail sales data which may dominate the morning..Then of course we have the FOMC meeting at 7pm London time. Good luck.