Yesterday it was the Greek confidence vote, today it is the FOMC. Results are likely to be similar.
Just as reaction was relatively muted after Papandreou squeaked through, it will likely be muted after the FOMC statement is released at 12:30 EDT/16:30 GMT.
The market expects the FOMC to downgrade its economic assumptions for the first half of 2011 and maintain the view that the slowdown we are experiencing now is transitory.
The press conference at 2:15EDT//18:15 GMT should be more interesting. Indications are that Bernanke will voice support for the Fed adopting an explicit inflation target. That could potential sooth inflation hawks. It cuts both ways, however as it would oblige the Fed to act if inflation were to drop too low…
For now, the market flirts with a 1.4400 vanilla expiry (14:00 GMT). We trade now at 1.4393.