Central banks around the globe are likely to keep things very liquid in the months ahead. China is now talking cuts, the Fed is likely to Twist or print and the ECB will cut rates once it gets an assist from Brussels (make that Berlin).
Markets are discounting mechanism and they are discounting an even greater flow of cheap funds.
Also helping risk is the notion that Europe might rejigger the ESM so that it can inject capital directly into banks while having recourse on the sovereign, sort of an off-balance sheet way of the sovereign bailing out its own banks…
EUR/USD is off lows of 1.2445 as a result, now at 1.2490. Resistance remains in the 1.2530/40 region; stops are heavy above 1.2550.
