The Treasury market is convinced the Fed will hike today, but is not convinced about the longer term. The FOMC’s response is likely to be a ‘dovish hike’ and that’s priced in, to a large degree. Uncertain about how much slack there is in the economy or the labour market, FOMC members are inclined to want to ‘normalise’ rates while they have the chance, but they seem very pragmatic about the longer-term outlook, write some analysts. Other analysts, such as Steven Blitz from TS Lombard, believe the flattening out of the curve is due to the global demand for dollar collateral for dollar lending which they take into account as a way of softening any effects of its normalisation process. INTL FC Stone provide some interesting insight into the relationship between a weaker US dollar and the Fed’s balance sheet reduction exercise and how this helps cushion excessive steepening of the curve. In today’s briefing we also turn our attention to the commodities space, looking at copper and Non-OPEC supply, the role of the new age of technological disruption (AI, IoT) will play in global growth and it’s parallels with the dot.com boom, and finally the PBoC’s FX policy.