EUR

i recommend to sell at 2845 i dont think abt 2930
market already made 3067 high
so i think its hold 3080 and 3120
i hope we will see good downside move from now

Passion Trader: Hungary is blown out of proportion. Its a debate about the bank-tax that the Hungarian gov. wants, not closing down public transport and hospitals that the IMF wants, and little things like reducing the salary of the HNB's director which is currently twice the salary of the Fed's director... Now why would the IMF oppose that? Hm...

Anyways, I'm happy to short EUR/HUF from 290, and 230 USD/HUF, every time the media has something to say about Hun.

The only remorse I have is that there is no Spanish currency, so I could long that too...

Ashraf, is it that your long term view for a fall in the Euro to 1.16 has changed?

EURO SOVEREIGN DEBT CRISIS POISED TO GO VIRAL: The European authorities "bank stress test" perception management campaign succeeded in lulling the markets in the last 2-3 weeks, but this lull is about to end, undone by a string of real-life developments as follows:

Spain: The Spanish Senate, in a preliminary budget vote, rejected today by 217-117 the government's proposed spending ceiling for the 2011 budget. Earlier, the lower chamber of the legislature had barely passed the proposal by an unsustainable plurality of a single vote and then only because the pivotal Catalan nationalists decided to abstain for tactical reasons - with a warning that their final vote on the budget will be negative if their demands for increased Catalan autonomy (already rejected by the Constitutional Court) are not met. The Catalan autonomy issue is big. Spain is being forced to choose between a major constitutional crisis and a renewed major fiscal crisis.

Hungary: The new government over the weekend told the IMF/EU that it will not continue the IMF-prescribed austerity program in 2011, placing a huge question mark on the country's $150 billion foreign bank debt. Almost all of that debt is owed to European banks ($38 billion to Austrian banks). Hungary's move was dictated by domestic political realities that have crystallized after 2 years of IMF austerity. The IMF cannot afford to back down and continue lending to Hungary without austerity conditionalities because doing so would collapse the IMF's negotiating posture vis--vis Greece and the rest of the European South. But without continued IMF lending, the position of European banks - especially Austrian banks - that own Hungarian debt becomes untenable.

Ireland: The stabilization package begins to unravel, posing new threats to the country's $867 billion foreign bank debt (of which $634 billion to European banks). Echoing arguments made by the Hungarian government, one of the governing coalition parties said in parliament that it is not "politically feasible" to continue the levels of austerity demanded by the European Central Bank. On cue, Moody's downgraded Irish government debt to Aa2 from Aa1. Moody's explained that "today's downgrade is primarily driven by the Irish government's gradual but significant loss of financial strength, as reflected by its deteriorating debt affordability."

AN UNINTENDED CONSEQUENCE OF THE FINANCIAL REFORM BILL: It seems that the financial reform bill that President Obama is about to sign contains a liability clause aimed at the rating agencies that would allow investors to sue them for failure to conduct adequate investigations into the assets that they rate. If so, expect the ratings of European sovereign debt to take further hits going forward.