Troika talks in Greece are said to have been productive, and encouragingly, the suspended review of Greece's austerity implementation is expected to resume next week. As such, the Greek Finance Ministry expressed confidence that the next tranche of badly needed bailout cash would be forthcoming - a development that has allowed the market to breathe a collective sigh of relief. European equity markets finished the day strongly higher yesterday, and this morning many Asian indices are also trading in positive territory. The Nikkei is +0.2% and shanghai Composite +2.6%, although the Hang Seng is one of the few laggards trading -0.4%.

With the risk event in Greece winding down, market attention is now turning to the FOMC meeting due this evening, where it is widely expected that operation twist may be introduced. This plan would involve the Fed gradually shifting its portfolio of government bonds from short-term securities to longer-term securities - thereby extending the maturity of holdings on its balance sheet, and in turn pushing down long-term interest rates. What is less clear is whether such action would have the USD-debasement effect that the past two instalments of quantitative easing have had. Certainly, the Fed cannot afford to weaken the currency too significantly given that CPI is already up at an uncomfortable 3.8% YoY in August.

Coming up today, the release of the BoE minutes will be keenly awaited; in particular, market focus will be on whether MPC member Adam Posen has managed to convince any other committee members to dissent with him in favour of further asset purchases in the UK.

In other central bank news the Norges bank is also due to meet today, but given the prevailing turbulence in the markets and heightened uncertainty as the Eurozone crisis plays out, consensus expects they will leave rates on hold at 2.25%. Also due today will be Canada's latest CPI reading for August.

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