Traders are understandably focused on digesting yesterday’s less-hawkish-than-expected FOMC meeting as well as today’s Eurogroup meeting, which has been billed as the “drop dead” date in Greece’s debt negotiations, but we’ve also seen a major shift from Norway’s Norges Bank in today’s European session.
The September 2015 Eurodollar future is 3.5-4 bps higher, marking the best session since early April. The news from the FOMC was not so outside consensus that this price action should have been expected "unless market participants were offside short," expecting that there would be greater inferences made about a rate hike coming soon.
The Federal Reserve has maintained its Fed Funds rate at 0% (the so-called Zero Interest Rate Policy or ZIRP) for fully six-and-a-half years in an effort to stimulate the economy and bring down the unemployment rate. The Fed Funds rate will be at the same level come this time tomorrow, despite encouraging signs of a “spring thaw” in economic activity.