EUR

Is the Euro still thought of as going lower now or are we about to see it go higher if Greece bailed out this weekend as being suggested?

Greece trying to cause a short squeeze on their bonds. Any trades executed through HDAT (electronic platform controlled by Bank of Greece) that is unable to deliver (i.e. seller cannot deliver cash bond sold) then must go to a reop auction where they are forced to borrow the bonds (at likely punishing rates) to deliver.

ashraf - i notice a slight change in timing in your call on euro. you previously thought we would see 130 and 128 on euro around mid april. but i am now reading you think we will see this before end of Q2. is there a specific reason for this?

Ashraf, you touched on this in today's IMT but to further expound, how unusual do you find it that the yield spreads on the other euro zone peripherals such as Spain, Italy, Portugal and so on (Ireland appears to actually implement their austerity measures well so I exclude them) have not blown on nearly to the extent that Greece's has? Is one way to interpret this as the bond market not seeing the contagion spreading beyond Greece, i.e. betting on a market accpetable (delay and pray) resolution? I saw Greece's yield curve go inverted today and was then astounded to observe the spreads to the Bund on the other peripherals.

What outcomes would be beneficial to the euro in terms of near-term appreciation? Aside from an ECB rate hike, which is unlikely, would a withdrawal of Greece from the monetary union actually boost the value of the euro? Would any IMF, EU, or combination of the two funded solution create anything other than a short-term short covering rally?

Thank you

Not sure why the Euro is recovering - is this another dead cat bounce before we hit lower lows?