Morning Update – 14/12/2016 – by Arjun Lakhanpal

Morning all.. Wall St closed up 0.65% which is impressive so close to the Fed meeting tonight but Asia found it tough to rally with the Nikkei closing around unchanged.. Oil markets were lower which weighed with WTI down over 1% and US 10yr yields softened to 2.44% weighing on the dollar. USDJPY was quiet even though BoJ increased purchases for 10y-25y maturities by JPY 10bn to JPY 120bn; first time boosted buying in the middle of the month (at least during 2016); curve bull flattened with 30y yields dropping 7.5bps. BoJ Official: The increase in the BoJ’s purchase of super-long JGB’s was due to the recent rapid increase seen in their yield; the buying is aimed at steering the yield curve towards what the BoJ thinks is appropriate but is trading below 115.00 and EUR is bid again after strong corporate demand yesterday. Some dollar longs may wish to square up in front of the Fed as whilst they will likely hike there is some concern over the message they may send regarding further hikes. Looks like being rather quiet though barring headlines. This morning we get French and Italian CPI, UK unemployment data  and EU IP..Good luck..