- Analysts will be busy poring over the exact details of the bank stress tests carried out by the EBA. I’m thinking they are more likely to be looking for bad news, rather than good news, so any surprises are likely to be EUR negative. 8 out of the 90 tested banks failed the test.
- The next emergency meeting on a Greek bailout proposal will be on Thursday but judging by the many and varied options being offered up by different European leaders, the market isn’t expecting too much. With the market very bearish on the EUR, the risk here might be that an unexpected development on a second Greek bailout catches the market by surprise and initiates a short-covering rally.
- German ZEW and Chinese PMI data will impact on risk appetites.
I’m thinking that a short EUR strategy for the first 3 days of the week but flipping into a long strategy as the emergency meeting looms, might work. Let’s see how it develops.
