Morning Update – 27/09/2016 – by Arjun Lakhanpal

Morning all…Wall St closed lower as fears grew in front of the Clinton Trump debate with the S&P down 0.86%. The general consensus was that Clinton won the debate and FX markets saw some steep moves but the Nikkei closed up 0.72% and Topix up 0.79%. USDMXN the big gainer as a Clinton win takes the pressure off Mexico (one of Trumps goals is to build a wall on the border). Risk-on theme overnight as the commodity complex in G10 were the main performers versus the USD overnight: AUD up ~35bps, CAD up ~25bps and NZD marginally higher, compared to yesterday’s LDN close. To provide further impetus for AUD’s out-performance, Australia’s Consumer Confidence Index released stronger than expected at 120.6 vs 115.5 previous. JPY the largest under-performer versus the USD overnight, with USDJPY up half a percent, in line with broader risk tone. Markets’ reaction looked to give the first presidential debate win to Clinton after MXN strengthened against all major peers, rallying as much as 2% at the highs versus the dollar; A CNN/ORC poll showed 62% of viewers believed the Democrat won. Mario Draghi has become the latest European official to push for the EU to take a tough line in negotiations with the UK over Brexit, saying Britain should be refused access to the single market unless it sticks to rules on free movement of labour. This morning we get Swedish PPI and Retail Sales and Italian Industrial Sales.. Good luck…