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Operation Twist is a clever way for the Federal Reserve to stimulate the economy when interest rates are zero. Named after a dance craze from the 1960s, the Federal Reserve was inspired by the Chubby Checker hit “The Twist” that made Billboard records across the nation. When an economy is weak, central banks usually respond by lowering interest rates but when interest rates are already zero, further rate cuts are not an option. So what can a central bank do?

http://www.bkassetmanagement.com/weekly-education-center/what-is-operation-twist-definition/

3 ways that the Fed could go:

1. refrain from taking further measures for now, once again saying that it stands ready to act if needed. This is the worst option for equities.

2. Fed could extend Operation Twist. This would be better than doing nothing, but it is unlikely to lead to a sustained rally in equities or other risk assets

3. FOMC could announce a full-blown, brand new programme of Large Scale Asset Purchases. This is what the market is hoping for, and this is also what equity investors have been pricing in recently. 

http://www.fx360.com/commentary/david/7833/us-preopen-call.aspx

Despite this speculation there remains a political dynamic with respect to further Fed intervention in an election year, which could make any further substantial easing politically problematic for the Fed, given fierce Republican criticism of the policy a year ago.

http://www.cmcmarkets.co.uk/blog/posts/currency/markets-looking-fed-placebo

The election result looked likely to yield a coalition government led by conservative New Democracy but leaves an emboldened SYRIZA bloc to rally angry opposition in the streets to the punishing terms of the bailout

http://uk.reuters.com/article/2012/06/17/uk-greece-election-idUKBRE85F05520120617

http://www.cnbc.com/id/47849237

Bearish news for EURO 

http://uk.reuters.com/article/2012/06/17/uk-france-election-idUKBRE85F0NP20120617