No rate hike!

United States

As widely expected, the Federal Reserve has not raised rates this week, and has toned down its expectations for further hikes from 4 this year to just 2. Futures are signalling that the most likely date for the next hike is June, or later. Based on their earlier statements, the US economic fundamentals in terms of jobs and inflation was very much within the Fed's goals for a hike. However, there is also uncertainty about future growth with US manufacturing contracting.

Europe

The ECB has expanded its QE by 40b Euros, and has now included corporate bonds in its purchases. There is no question this will have a distorting effect on prices in the bond market, with at least some spillover into equities. This news initially confused the market with the EUR/USD falling about 1.5-2% and then subsequently rising to regain the entire down move and then go up some more. the EUR rallied strong after the Fed's decision and the Dollar index has dropped below a key support. The ECB action to further ease complicated the Fed's decision, and a accomodative monetary policy in Europe, Japan, China and a restrictive policy in US would have meant chaos. Moreover, this would have pushed the USD higher against all currencies and hit US growth substantially.

Japan

Japan has not increased its QE, and the effect of its previous negative interest rate policy were lost very quickly. It remains to be seen if the JCB takes this as a challenge and goes further negative, or looks for alternate measures to boost inflation. Currently, inflation is very far away from their 2% target.

China

China continues to add liquidity to its system with rate cuts every couple of months, but the big question hanging at the start of the year on everyone's mind, of whether there will be a big devaluation, seems to be put off for now. Outflows have declined, and the panic seems to have subsided for now.

Conclusion

The markets are being pushed into risk-on mode rather recklessly by central banks. Governments continue to drag their feet on reforms everywhere, and with US elections later this year, the US is unlikely to do anything until next January. The Fed's hands are tied as well, as both parties will attack the Fed if the economy slows after a Fed rate hike.
A dollar index downmove back to its starting point would reflate a lot of commodities, emerging market currencies, and also boost the US economy. There is talk of a Shanghai accord at the G20 summit, but no word officially. The decline of the Dollar would also boost oil prices, and that would relieve a lot of pressure on oil producers in US and the OPEC. OPEC countries with soverign wealth funds have turned sellers instead of buyers as oil has stayed low for a second year.
With the war in Syria also showing signs of winding down, a falling DXY, and no immediate rate hike or China devaluation, the risk-on sentiment should carry on at least for a month or two.