Greenback blasts yet higher ahead of FOMC

There's scarcely anybody in the market who expects an actual monetary policy move from today's Federal Open Market Committee meeting, but it's nonetheless the event of the day as participants will parse the chairman's words for clues on the chances of a fourth rate hike this year, says John Hardy, Saxo’s head of forex strategy.

Beyond that, for hikes in 2019, scepticism rules.

For today at least, forex market movements indicate the strength of the market's conviction that this year will see at least three interest rate increases. The greenback is ploughing still higher into stronger ground ahead of the meeting: EURUSD has touched below 1.200 and USDJPY is near 110.00.

US equities, meanwhile, remain compressed into tight ranges, but will soon be pressed, says Peter Garnry, Saxo’s head of equity strategy . We've already seen one breakout as Apple closed 2.3% higher on the back of an unexpectedly strong interim result that saw both revenue and iPhone sales exceed forecasts. "I was quite surprised by this – the slowdown in iPhone sales that was predicted didn't happen," Garnry notes.

In crude oil, Monday's spike higher that resulted from Israeli president Benjamin Netanyahu's "revelation" about nefarious Iranian nuclear activity proved only temporary as the market recognised this for what it was: old news, reports Ole Hansen, Saxo’s head of commodity strategy . But that said, President Trump's decision on or before May 12 about whether to scrap or try to amend the Iran nuclear deal remains a "binary event".

For now, though, the oil focus returns to fundamentals, including the upcoming EIA report at 14:30 GMT today.