14 June 2017 at 8:11 GMT
• FOMC widely expected to raise rates, focus on inflation, balance-sheet views • Any surprises from the Fed could be on hawkish side: Hardy • Longer US rates would need to rise to get USDJPY higher: Hardy • Australian stocks have momentum despite weak commodities prices: Garnry • Sweden's Hexagon reported to have held talks on possible sale to rival
By John Acher
The Federal Open Market Committee is widely expected to raise US interest rates by a quarter point on Wednesday, though not to introduce any major shifts in policy.
Any divergence from financial markets' muted expectations for today's FOMC could be on the hawkish side, rather than dovish, as Janet Yellen, whose term as Fed chairman ends next year, is already in legacy mode, says Saxo Bank's FX strategy chief John J Hardy.
Markets are looking for the Fed's policymakers to focus on recently soft US inflation and possibly to discuss plans for unwinding the Fed's hefty balance sheet, though Hardy says the balance-sheet discussion is "going nowhere."
US May CPI and retail sales data are due before the FOMC's announcement.
Any sign of Fed hawkishness could get things moving in the likes of USDJPY, which has been under pressure.
"To get USDJPY back higher, we do need to see long US rates higher," says Hardy.
USDJPY remains pressured to the downside
Source: Bloomberg/Saxo Bank
Source: Saxo Bank
And Garnry says that Australian shares have good momentum, despite weak commodity prices and mixed economic performance in China.
Yellen "in legacy mode". Photo: Shutterstock