The big event today is likely in the FOMC minutes as investors dissect the true meaning of removing the word “accommodation” from the Fed statement. This brought out a raft of analysis on where neutral rates are and could be over the next few quarters, writes Bob Savage.

Some think the Fed is already tightening – read President Trump, others see them behind the curve. Inflation showed them more in the Goldilocks zone and so the bounce back in U.S. shares Tuesday after being oversold might make some sense but be aware that the minutes won’t be softer nor gentler towards future hikes.

The second event is UK May addressing the EU Brexit summit in Brussels as she tries to buy more time for talks after spending nearly three hours with her cabinet on the subject.

What seems obvious is that the British pound (GBP) is not going to find this speech softer or gentler in her approach. What already happened hasn’t derailed the feel-good bounce completely, but it has dented the momentum.

The global extension just stalls in Europe with UK CPI lower, EU Construction lower, EU car registrations plummeting and EU HICP unrevised – all aren’t enough to change the big dynamic but clearly do shift the mood into a lower gear.

With FOMC Powell warning that a disorderly Brexit could harm the U.S. economy, with India’s Modi under fire for his silence on their version of #MeToo and his cabinet, with Turkey back to the bond markets with $2 billion 5-year sale with spread wider to U.S. at 4.48%. On the day, the focus is GBP as it’s the logical mix of U.S. and UK news risks ahead, but the chart remains biased to risk higher with 1.2950 the key for trouble and a less gentle end to a soft start.

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