Morning Update – 07/09/2016 – by Arjun Lakhanpal

Morning all.. Very weak US ISM data yesterday saw Wall St actually rise as it seems less likely the Fed can hike, especially in September.. S&P closed up 0.3% but Asia was a little weaker as the weaker dollar pushed the JPY higher and consequently  the Nikkei fell 0.41%. JPY the standout out-performer versus the USD overnight – up ~75bps – amongst a mostly broader USD weakness tone G10 FX space. San Francisco Fed President John Williams on the wires early LDN morning advocated for raising rates “sooner rather than later”, but offered no new clues on whether the committee will be ready to act on this month. As a result of the ISM miss yesterday and a lack of clear signal from the Fed official, has seen taking down odds of a hike at the September 20-21 FOMC meeting.. Notably from Australia, after a in line GDP release many now no longer expect a November rate cut and now believe the RBA’s elongated easing cycle is complete post the 2Q 2016 National accounts which were relatively positive overall: GDP rose +0.5% q/q to be +3.3%yoy – broadly in line with expectations whilst the rebound in both productivity and nominal income were very encouraging signs from some economists’ point of view. AUDUSD held on marginal gains overnight following the data release. This morning we get UK House price index from Halifax, Industrial production and manufacturing production. We also get The rate decision from Sweden’s central bank (no change expected but weak data recently) and Norway Industrial Production.. Good luck..