Chillin' out till it needs to be funded
IT looks likely that Euro will break down from the 1.32 levels of earlier this weak when it continues from $1.297 levels as US Economic data remains wishy washy about the recovery but the Aussie and the Euro have finally seemed to have given up on their troubles with no new funds available to extend credit or play the markets even as Corporate investment grade bonds remain in vogue in the continent as corporate performanace and Fixed Income market performance remains reasonable. The gains from shorting the Euro may yet be limited though, probably till 1.19 before the fiscal situation stabilises from convenient pacts to spend $20 bln each extra over the next 5 years in the Growth compact or by guaranteeing Intra EU trade with member states signing off on higher volumes of Economic interdependence where possible and the South managing to follow Italy and Ireland into relative stability. Of course with EUR 100 bln in bailout funds
Supporting the future life of the Euro is the predisposed to agreement editions of the Hellenic Summit games as examples for the next steps to be undertaken , and the Euro managers can pull it off without public spats and controversy. Most of the controversy would come from the noise of the breakup of the Euro which is something that continues to unite the Euro zone. However prospects of a managed exit for Greece would not be easy for EU if they do get down to consider such an option and fall prey to the Euro baiters.
Irrespective of national troubles including those in non Euro states like UK, the current small bites of contraction may still be more sufferable than to plan such an exit and apparently the noise comes from Euro states being obliged to talk the talk on such an option for the new Government in place in GReece. Enough Greek citizens know that a future without the Euro is unthinkable and the new government is unlikely to think it in a hurry.
Meanwhile the 7 AM Wednesday report was positive as usual with another 3.4% rise in the Purchase Index and a small positive correction in Refi but single family housing unit sales continue to flail even as Bank of America kick starts its campaign to reduce Principal by $150 k on each underwater mortgage over $250k, the offer coming in the mail
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