This week’s Fed meeting – plus whatever the FOMC might deliver over the next year through rate hikes and balance sheet run-off – looks like another missable event similar to its March move, say analysts. That said – after blocking out the short-term noise – a thorough understanding of the balance sheet reduction is necessary for investors and in today’s note we feature some work from Macro Insight Group, who conducted months of detailed work on this theme. We’ve also focussed a lot of the China and commodities theme in today’s briefing. The PBoC announced at the end of May that it was adding a counter cyclical adjustment factor to the formula that they use to fix the daily exchange rate of the CNY. The PBoC has a long history of sudden changes to the way it manages its exchange rate regime, with the consequences only becoming clear after the event. We highlight a report that looks at possible market consequences of the regime shift and more broadly at sentiment to the currency. Also we look at what’s behind the recent weakness in Iron ore prices; the rise in scrap metal use for steeel production, while we look at some the ramifications for certain trades as a result of oil staying within the $40-$60 a barrel range.