• Today's key event is expected to be the outcome of the FOMC meeting. The Fed seems set to take the next step towards 'normalizing' monetary policy. Removing the phrase; "it can be patient in beginning to normalize the stance of monetary policy", would leave a June rate hike firmly on the table. An unchanged wording would be an indication that rates are likely to remain at current levels until at least September. We expect them to make this change. However, this does not necessarily mean that the Fed will move in June. Fed Chair Yellen is likely to use her post-meeting press conference to emphasise that any move is data dependent and most FOMC members are unlikely as yet to have made their minds up.  
  
  
• With the UK election fast approaching, today's Budget speech probably has only minor implications for the economic policy outlook.  The Chancellor should be able to provide an upbeat picture of the economy with decent growth and low inflation. Also public sector borrowing now looks in better shape and may undershoot forecasts. The emphasis will still be on fiscal austerity.  However, the Chancellor may feel he now has leeway to offer a few giveaways, both in terms of taxes and possibly an easing in the pace of expenditure cutbacks.
  
  
• Also in the UK the latest labour market data should provide further evidence that the labour market continues to tighten. We expect to see another fall in the unemployment rate and a rise in earnings growth. The MPC minutes for March will likely show a 9-0 vote for unchanged policy but it will be interesting to see what members have to say both about the labour market and the potential disinflationary impact of a strong pound.