Consolidation was, for all intents and purposes, the word of the day in NY trading. Equity markets opened up deep in the red but managed to creep into marginally positive terrain ahead of the close despite what was overall mixed US economic data.

The NY Empire manufacturing report beat expectations by a hair, but the guts of the report were much better than the top-line number suggested. New orders jumped to 25.4 from 8.8, shipments rocketed to 25.6 from 15.1 and employment rose to 12.4 from 5.6 the prior month. Prices received also increased while price paid fell, suggesting some margin expansion (higher profitability). The NAHB (homebuilder) index threw some cold water on the positive Empire number, however, as it printed 15 in March and well short of the 17 expected. Furthermore, the buyer traffic component dropped to 10 from 12 and is now at the lowest level since the markets were putting in their cycle lows back in March 2009.

Traders pretty well ignored the data and the price action remained painfully quiet as the session wore on. The looming FOMC rate decision and press statement have created a market in full consolidation mode and we expect little to change on this front as we head into the overnight sessions. All eyes will be on the Fed's musings tomorrow at 2:15pm ET.

The last three statements have been relatively status quo and thus we thought it useful to examine the price action in the currency markets immediately as the headlines hit the tapes. Particularly we focus on the goings on in the most liquid currency pair (EUR/USD) and one of the best barometers of risk (AUD/JPY). The price action in the former has been quite choppy around the FOMC press statement. The maximum absolute average move (either up or down) during the five minute window immediately after the release is 37 basis points. However, right at the five minute mark, we find that EUR/USD is only 12 points away from where it went in.

In AUD/JPY we looked a longer window of 10 minutes, given the relatively lower liquidity here. The results show little difference in trend. In the 10 minute window following the FOMC minutes, the cross witnessed an absolute average max move of 38 pips and was sitting only 14 points away from the 2:15pm ET levels at the end of the span. If nothing else, this analysis should suggest to traders that taking the immediate price action with a grain of salt makes sense. As long as the statement is devoid of any significantly new information (which we expect to be the case) we would anticipate more of the same this time around.