Important theme - Loving that EUR v the rest
There is definitely a building of EUR positive sentiment among the ‘professional’ part of the market.
Understand that when Italian and Spanish debt interest rates fall is that because parties are buying the bonds and if those parties reside out of the Eurozone then they have to buy the currency.
To that end more stressed EZ debt buying was seen last night after the generous Greek bond buyback (mentioned in my OPI’s this morning). Risk-seeking hedge funds are hoovering these things up because a) they have great yields in a world starved of decent interest rate returns and b) they feel the biggest default risks have passed.
Now add to that all the short covering EUR buying that will be forced upon the EUR perma–bears (short and caught!). You know I could count on my hand the number of EUR longs we have on our books. Our client base just will not buy EUR…………………..which says it all to me.