Latvia continues to negotiate with the IMF over a funding package, agreeing to certain IMF-imposed tax hikes but ruling out pension cuts, so far. The Latvian PM says there is a chance of reaching an agreement, but markets are growing antsy. Sweden and Austrian banks are particularly exposed to eastern Europe and a renewed focus on the debt bomb in that region could undermine the euro ahead, drawing attention from the reflation trade.
US equities are seesawing this morning, dipping back below breakeven to trade now about 0.2% at the moment. EUR/USD is down to 1.4190.
