The Day Ahead: Housing Starts and FOMC Countdown Overshadowed by Europe

Heading into a week expected to be more focused on Wednesday's FOMC Announcement, press conference, and updated forecasts, we instead got treated to the same sort of old-school Eurodrama that's kept rates near their all time lows for several years.  This time around, it's Cyprus (get caught up HERE if you need to).  This leaves the focus very much on the resolution (or lack thereof) of Tuesday's Parliamentary vote.

For markets, the troubling thing about Cyprus is attempting to discern which option is worse: a default or an unprecedented bank tax that suggests itself as a possibility for other Euro-zone nations despite claims that Cyprus is unique.  Very likely, the better eventuality for markets will be if something actually passes the parliamentary vote because the worst effects of the bank tax have already been seen (at least as far as market reaction) and nothing is going to change the fact that the EU "tried to do this."  

With Cypriot banks not opening until Thursday, if parliament doesn't vote on and approve something today, the effects of Wednesday's FOMC events could be muted, magnified, or distorted, making for a volatile situation heading into the last 2 days of the week.  There's an overdeveloped sense of "waiting" right now when it comes to "market moving events" and actual market movement.  Almost by way of afterthought, February Housing Starts print at 8:30am, following a night of moderately paced European data, including Germany's ZEW sentiment survey.