• NZD leads, GBP lags on the day
  • European equities higher; S&P 500 futures up 0.2%
  • US 10-year yields down 2.2 bps to 4.344%
  • Gold flat at $1,930.84
  • WTI crude down 0.6% to $89.93
  • Bitcoin down 0.3% to $27,089

With the Fed in focus, markets were prepared a slower session but the UK inflation surprise to the downside did help to provide some action at least.

A softer set of inflation numbers saw the pound fall as traders firmed up their conviction for just one more rate hike to come by the BOE during this cycle. The notable drop in price pressures are also feeding into some calls that the BOE may not even raise interest rates this week.

GBP/USD fell from 1.2385 to 1.2335 and the broader market reaction also saw equities move up a little while bond yields fell in the aftermath. The moves in turn are weighing on the dollar slightly and that helped to see GBP/USD recover back to 1.2365 currently.

Meanwhile, EUR/USD is up 0.2% to near 1.0700 with EUR/GBP up 0.4% to 0.8650 levels - its highest in nearly six weeks. The commodity currencies are the ones benefiting the most with AUD/USD up 0.5% to 0.6485 while NZD/USD is also up 0.5% to 0.5965 at the moment.

In the commodities space, gold is flattish awaiting the Fed while oil prices saw a dip in Asia trading below $90 and is sticking thereabouts for the time being.

It's now over to the FOMC meeting decision to jolt markets back awake for the remainder of the week.