On days that the Federal Reserve issues its statement that tends to be the main highlight of the trading session. However, with expectations running fairly low for a significant shift in the stance or forward guidance, developments elsewhere, especially Europe, are overshadowing it.

While Asia was able to shrug off yesterday’s US equity market slide, perhaps with the help of Apple’s earnings, Europe has not followed suit. Markets in Europe are lower amid a broad sell-off that is impacting nearly every industry group. The culprit, however, is the bond market sell-off. And the spark for that appears to be Greece.

The Syriza-led government was quick to do two things that play on investors’ concerns. First it wants to review the previous government’s effort to privatize the port authority. Second, it wants time to review that EU statement on threatening to increase sanctions on Russia. Neither of the two points seem unreasonable. However, many investors are biased to see these as substantive disagreements rather than procedural. Greek bonds have been crushed and stocks are off 6-7%.

Italian and Spanish 10-year yields are up 5-7 bp. Portugal’s 10-year yields are up 15 bp. Germany is bucking the move. The benchmark yield has slipped a basis point or two and is now at a new record low of 36 bp. In contrast, Japan’s 10-year is at 27 bp. The German yield is likely to fall below the Japanese yield even before the ECB’s bond buying program begins in March.

The euro is consolidating yesterday’s position squaring gains. It appears to be settling into a $1.1325-$1.1425 range. In our weekly technical note, we had seen potential toward $1.1460. We still would not rule this out.

Singapore Monetary Authority (MAS) joined a number of emerging and major central banks to surprise the markets. Earlier today it announced that it will reduce the slope of the Singapore dollar’s slope within NEER band. It did not change the width or central level. Nevertheless, within the context of Singapore’s monetary regime, this is regarded as an easing of policy. The Singapore dollar lost almost 1% today against the US dollar today, making it the poorest performer. The move was justified in terms of global and domestic inflation trajectory.

In contrast, the Bank of Thailand, which among the numerous emerging market central banks which meet this week was regarded as among the most likely to cut, stood pat. It argued policy was already accomodative.

Expectations that the Reserve Bank of Australia could cut rates as early as next week were dealt a setback today. And this has saw the Australian dollar extend yesterday’s gains to poke through the $0.8000. Recall on Monday, it had fallen to a 5.5 year low near $0.7850. Although headline Q4 inflation slowed more than expected (1.7% vs consensus of 1.8% and 2.3% in Q3), the RBA’s trimmed mean measure (its version of core inflation) was a bit stickier. It rose 0.7%, not the 0.5% the consensus expected. This left the year-over-year rate at 2.3% not 2.2% as expected. It was 2.6% in Q3.

The FOMC statement is still the highlight for the North American session. We look for minimal changes in the statement. The key for investors will be that the forward guidance about patience will most likely be retained. March is a different story. If it is going to prepare the market for a Q2 hike, it would need to modify that forward guidance again. Yellen had defined patience as a couple of meetings.

Separately, given the market’s sensitivity to oil prices, keep in mind that the Department of Energy will issue its latest report on inventories. Recall that last weeks API estimate showed a much larger than expected jump in crude stocks (12.7 mln barrels–more than a day’s output). Separately, news reports indicate that Saudi output has increased by as much as 300k barrels a day as it seeks to preserve market share. Given OPEC’s overproduction (vs quota) this will also give Saudi Arabia another bargaining chip. Separately, but related, Iraq also appears to have increased output. Not only is more Kurdish oil available, but Iraqi production itself appears to have risen by 150k barrels a day. The loss of some Libyan output has been more than offset.