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Hardy: Is the market pricing in too much Fed dovishness?

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This Wednesday's FOMC meeting is a 'critical' one for FX markets, not least because of the volatility we've seen in asset markets. That's the view of Saxo Bank's Head of Forex Strategy, John Hardy. John says the Fed is in a 'very difficult place' and its forward guidance has become something of an embarrassment. He also asks whether the market is pricing in too much Fed dovishness. 
John also considers the impact of the bank stress tests conducted by the European Central Bank. Market reaction has been muted and John says he's more concerned about the ECB's balance sheet while looking ahead at trading the euro.