The major macro themes of interest are:

i. the beginning and pace of the tightening cycle in the US.

ii. the expansion of ECB's balance sheet and reflation of Euro area.

iii. the Bank of Japan's QE.

iv. Chinese Economic Status

v. Greek –EU tensions / “Grexident”?

vi. Oil Prices

vi. Russian - Ukraine Crisis

vii. Middle Eastern Tensions

viii. UK’s 2015 General Elections

ix. Iran Talks1 A JPY crash as Japanese policymakers lose control of their currency

2 A EUR collapse on Euro-zone break-up fears

3 A USD surge on new legislation to force repatriation of overseas earnings to the US

4 An emerging market FX crisis triggered by excessive USD strength

Neutral Fed messageexpected, but risks skewed towardshawkish.

Neutral BOJ messageexpected, but risksskewed towards dovish.

Good news is bad newsfor the euro now.

Neutral RBNZ message could help the NZD.

A resolution to Greek uncertainty likely to boost risk appetite and weigh on the EUR.

….“where nominal rates are at lower bound, what determines real rates are movements in inflation expectations”, adding “we are starting to see a pass through… to the real economy though significantly lower real interest rates”. Thus, whereas in ‘normal’ times stronger data benefit a currency because they raise nominal rates, under QE and anchored nominal rates they simply raise inflation expectations and lower real rates.

One sentence we will be monitoring closely is: “The Committee continues to see the risks to the outlook for economic activity and the labor market as nearly balanced.” To put it more simply, we will look at whether the risks to the labor and activity outlook remain “nearly balanced” or perhaps “more balanced”. A second change we will be watching for is some indication that the Committee is closer to being ‘reasonably confident” inthe inflation outlook. In our view, further labor market progress, moving to a “more balanced” outlook and gaining confidence in the inflation outlook would send clear smoke signals that liftoff is only shortly ahead.

We expect the FOMC to borrow language from the 28 Januarystatement in characterizing the lull in growth in Q1 as being “in large part because of weather related disruptions and other transitory factors.”

The Office of Budget Responsibility (OBR) say this is “the largest peace-time deficit since at least 1830, based on the Bank of England’s historical dataset”. The Economist certainly believes the UK deficit has

“worrying implications for the sustainability of Britain’s recovery. Ultimately, a current account deficit represents a country flogging its assets or incurring debts to finance spending. That makes sense if the spending is on investments that will pay off in future. But Britain is on a consumption binge. The household savings rate is negative, according to one estimate, and household debt is forecast to balloon in the next five years. If that happens, Britain will grow as forecast, but at the cost of running down its wealth. It will be heading for a crisis.”