UPDATE: September Fed rate-hike odds near a coin flip; futures imply 56% chance of a 25-basis-point move

Futures now price a near coin-flip (56%) probability of a 25bp Fed hike in September, tightening expected policy paths and raising the risk of higher front-end yields. This tends to support USD and weigh on duration-sensitive assets and risk markets via higher discount rates and tighter financial conditions. Near-term positioning may become more volatile as rates expectations reprice into the meeting.