The long-feared squeeze is underway this morning after the successful Spanish and Italian bond auctions and the understated victory-lap from Draghi on the success of the 3-yr LTRO.

Greece remains and absolute basket case but contagion appears to be limited, at least at the moment.

Expect similar price action to Monday’s above the 1.2800 level with very good turnover on rallies.

I suspect we may get a squeeze up to the 1.2850 area before all is said and done.