• Fed raises rates by 25bp to 0.75%, and forecasts three rate hikes in 2017
• Trump rally sees the dollar hit all-time highs; renminbi remains stable against CFETS basket
• China data surprises on the upside, economy is stabilising
• Russian quasi-sovereign holdings outperform
• A cloud of political uncertainty lies ahead
Markets ended on a more positive note last month, but the year closed with a dark cloud of political uncertainty hanging over Brexit and the Trump administration. As we had expected, the Fed raised rates by 25bps to 0.75% and pencilled in an additional hike in 2017; taking it to three forecasted hikes. The Treasury market swung around in December, with the yield on the benchmark 10-year peaking as high as 2.60% post-Fed announcement, finally closing at 2.45%. The dollar also gathered pace, hitting an all-time high ahead of the month-end; the DXY Index closed 0.7% higher on the month.