A quiet economic calendar has left traders focusing on overarching themes in markets, mainly: the state of fiscal policy reform in the United States, and how that may impact the Federal Reserve’s rate hike timeline; how the announcement of the snap elections in the UK will impact the Brexit negotiations; and incoming polls ahead of the first round of the French presidential elections this Sunday.

For the US Dollar, it’s becoming more and more evident that any fiscal stimulus-driven inflation that could prompt a faster-than-priced-in Fed rate hike cycle is unlikely anytime soon. US Treasury Secretary Steve Mnuchin, who had previously laid down a marker for tax reform to materialize before Congress goes on their summer recess in August, has now backed off that goal. Instead, it seems like we’ll have to wait for Q4’17 before anything legitimate comes to fruition. In turn, traders are discounting the possibility of infrastructure spending well into 2018 (if at all).

The British Pound is holding onto its gains after the snap election announcement by UK Prime Minister Theresa May on Tuesday. With a chance to build a sizable majority in UK parliament, PM May will be giving herself more breathing room when it comes to the Brexit negotiations, which means she can take a softer approach during the negotiations with the EU without risking a revolt within her party that would threaten her power. BOE Governor Mark Carney is speaking at 11:30 EDT/15:30 GMT this morning in Washington D.C., but don’t look for any significant indications as to what the BOE will do next; he’ll want to make sure the BOE doesn’t look politicized at the start of the Brexit process.

Elsewhere, with incoming polls showing that Emmanuel Macron is neck-and-neck with Marine Le Pen ahead of the French elections this Sunday, FX markets are pricing out a worst case scenario (that the centrist candidate won’t make it into the second round on May 7). Nevertheless, one-month implied volatility for EUR/USD having increased from 7.25% to 13% over the past five weeks, and it now sits at its highest level since the Brexit vote in June 2016.