Austrian central banker Nowotony says falling inflation and slowing growth are reasons to think about a more “expansive monetary policy”. Italy’s Berlusconi says a bailout package that Merkel has signed on to will be proposed at tomorrow’s EcoFin meeting. Germany announced a solution to the Hypo Real Estate bailout.
Lower rates may undermine the euro but talk of a comprehensive bailout plan could offset that and prompt a bit of short-covering now that Sydney has feasted on the sub-1.3665 stops. 1.3705 is first resistance.
