The weekend press which we covered had Sig Grillo declaring the likelihood of leaving the Euro and Bersani saying he would form a government and all would be well (ok, maybe not well but ok!). The whole mess is likely to have some weight on the euro but I warned on friday that a lack of follow through may see shorts taking some back and some profit off the table.

The sterling story is much the same – no follow through in a quiet asian market; this may change in europe.

For the cross EURGBP I refer the long side without doubt as I am sure has more pain to bear and overall I am of the view that it could trend much lower against a euro that is more likely to stay in a consolidation range. we tend to find that problems like the Italian fiasco are soon forgotten.