Morning Update – 12/09/2016 – by Arjun Lakhanpal

Morning all.. Wall St had a very weak session Friday as fears grew that the Fed may actually go ahead and hike after two voters at the Fed signalled a desire to move soon. The S&P fell nearly 2.5% having been subdued for the summer months. The nervousness spread to Asia with the Nikkei down 1.8% even though USDJPY held many of the gains made as the dollar rallied. US bonds were the main driver with the 10yr braking out of recent ranges. Relatively range-bound G10 FX start to the week with a negative risk tone the prevailing theme across asset classes. The commodity complex currencies all down versus the USD with CAD the relative under-performer, in line with Brent traded down ~1.5%. JPY the largest out-performer as USDJPY traded to settle around the 102.50 area.. On the Fed speakers front, all eyes are now on Lael Brainard as the Fed Governor speaks today in what will be the final appearance by a Fed official before the FOMC meeting. Atlanta Fed Lockhart and Minneapolis Fed Kashkari are also scheduled to be on the wires, however unlike Brainard, they are non-voters. The market is currently pricing in only a ~25% chance of a September rate hike. This morning as we wait for Brainard we get no data of note. Good luck..