Archived IMT (2010.05.09)

Germany proposed a funding facility of E500 billion with the help of the IMF, E60 billion of which will be in an loans from the European Commission and E440 billion in the form of government-backed guarantees from Eurozone nations. The E500 bln is an addition to the E110 bln announced last week by the EU and IMF to help Greece into the next 3 years. Theres no news about the ECB role, whether in the form of buying bonds or providing long term loans. The lack of any ECB participation so far has not backfired on the euro as markets rallied on the scale of the E500 bln package. What about the ECB? Is the JC Trichet waiting for the next fire to erupt before stepping in? We have seen gap-ups in the EURUSD before on unprecedented announcements, and this is certainly one of them. But neither the daily/weekly technicals look positive for the euro nor does the outlook for Portugal and Spains ability to contain soaring bond yields and the years debt payments. And we havent mentioned the defeat of Angel Merkels coalition at the lower house of parliament after her CDU party lost majority in Germanys most populous state,