We would say today’s main event is the culmination of the Fed’s two-day meeting and the announcement slated for 2 pm this afternoon, however with the 90 economists polled by Bloomberg all expecting no rate hike, today’s Fed decision also happens to be the least anticipated in years (which may be just the time for the Fed to prove it is not driven by market considerations and shock everybody, alas that will not happen). And considering how bad the economic data has gone in recent months, not to mention the recent easing, hints of easing, and outright return to currency war by other banks, the Fed is once again trapped and may not be able to hike in December or perhaps ever, now that the USD is again surging not due to its actions but due to what other central banks are doing.

In fact, the biggest central bank announcement today may not be from the Fed at all, but what the Swedish Riksbank did a little over two hours ago, when it kept its interest rate at the already record low -0.35%, but boosted its QE by a further SEK65 billion, in the process slamming its currency and sending bond yields tumbling. This is what it said:

Overall, the Executive Board’s assessment is that monetary policy needs to be more expansionary in order to underpin the positive development in the Swedish economy and safeguard the robustness of the upturn in inflation. The Executive Board has therefore decided to extend the government bond purchasing programme by an additional SEK 65 billion so that purchases will amount to SEK 200 billion in total by the end of June 2016. The repo rate is left unchanged at ?0.35 per cent but an initial raise in the rate will be deferred by approximately six months compared with the previous assessment.

The impact of this announcement on both the currency….

… and Sweden’s bond yields, which tumbled to fresh 2 year lows, was immediate.

Why is the Riksbank doing this? Simple: to preempt the ECB just as we described two days ago in “”Giant Wave Of Money” Heads For Sweden, As Draghi Creates “Nightmare” For Riksbank.”

For now Sweden’s response, now that currency warns have official returned after a 6 month hiatus is to monetize even more debt, and sending bonds yields to fresh lows. Sure enough, this just happenede moments ago in Germany:

In fact, as the following chart shows, the short end across Europe is once again getting ridiculous:

And it is in this environment of resurgent deflationary signals, which are merely indicating expectations of more central bank frontrunning, that the Fed is expected to hike rates, and push the already strong dollar into the stratosphere, crushing US multinational exporters? Good luck.

Taking a quick look at overnight markets around the globe, Asian equities traded mostly lower following the subdued U.S. close as markets remain cautious ahead of the FOMC meeting today, while weakness in the energy complex also weighed on risk sentiment . ASX 200 (-0.2%) traded in mild negative territory with weakness in financials following a miss on earnings from big-4 bank NAB.

Shanghai Comp. (-1.7%) was weighed on by tech names as participants await the conclusion of the Chinese plenum and details of the next 5yr plan, where some have touted a 6.5% growth target. Nikkei 225 (+0.7%) outperformed as telecoms lifted the index amid gains in Softbank after Alibaba rose by 32% post earnings, in which the Co. holds over a 30% stake in. 10yr JGBs traded higher as the cautious tone in markets drove 10yr yields below 0.3% for the 1st time in 3 months, while the BoJ also bought JPY 380b1n of long to super long end bonds.

Remember: on Friday the BOJ may or may not join the latest round of currency warfare when it too eases, although with the JPY the carry currency of choice, for now other central banks have been doing its job for it.

European equities (Euro Stoxx: +0.8%) trade firmly in the green this morning, reversing the sentiment seen in the US and Asia amid positive stock specific news . TMT is the notable outperforming sector, benefitting from pre-market news that BT (+3.2%) merger with EE has been provisionally approved by the CMA, with stocks also benefitting from strength in both the energy complex and metals. Elsewhere, the most notable earnings report today came from Volkswagen (+4.5%), who cut 2015 profit target ‘significantly’ and missed on expectations, however shares reside in positive territory with the report not as bad as some had anticipated.

In FX, AUD has been the notable underperformer in FX markets overnight after Australian CPI figures saw the RBA preferred trimmed mean reading (2.10% vs. 2.40%) print at 3-yr low, with price action relatively muted elsewhere. Of note the USD-index resides in negative territory (-0.2%) ahead of the FOMC rate decision later today, with markets pricing in a 6% chance of a hike today.