The Spanish bank stress tests at some point tomorrow. The privately administered tests will determine how much of the EUR 100 bln EU bank aid package Spain will have to draw down. Recent shifts in EU political winds also make it likely that however much is borrowed, the liability will end up on the books of the Spanish sovereign.
The market feels a bit short of EUR/USD and subject to a further squeeze if we get much above 1.2905/10. Look for sellers back up toward 1.2975 and 1.3000.
