Today was the first day that the Nikkei cash has had to reflect upon the FED’s decision, as was closed Wednesday for a national holiday. Today's trading result was a small decline (-0.3%) which on the heels of the 2% rally Wednesday was quite refreshing. The other core markets also saw a small decline with the shanghai and Hang Seng both closing -0.3%. In late US trading we continue to see small selling but with volume very light and the weekend upon us, it is hardly worthy of discussion. The Shanghai continues to play at the 3k mark but with many markets making similar holding patterns it is only time before we make a decisive break.

Despite more weak data the USD continues to be the beacon for demand. Today it was the turn again, for the GBP to suffer, losing 0.9% to close again below the psychological 130 figure threatening the BREXIT break levels (128.00). FTSE performed best but that is because the GBP had already taken the heat. Interesting that because it is not a sudden move the GBP has not really made that much of CAC and DAX both lost around 0.5% whilst IBEX cost the most at -1.2%. The DAX opened almost unchanged and did attempt to rally but as the day wore on and oil started to slip, the market bailed to the selling as financials led the way, yet again.

US stocks traded heavy for most of the day and the selling increased in sympathy as oil declined (currently down 4%) but has had a reasonable run for the week. On the year the DOW closes a little over 5% up which in the twelve months is over 10%.

Now that this could turn into the most expected hike in years, could the markets be pricing it already? Despite the FED play, the market reacted to Wednesday`s comments by pricing in the probability of a December hike at 68%, up from the previous 55% ahead of the statement. The bond markets have reacted with bull flattening as the chase for yield returns, along with credit tightening (for quality names).