Focus will be on the German constitutional court conditions

The WSJ has a great preview of tomorrow’s German court decision on the legality of the ESM and makes a case for euro shorts heading into the announcement at 0800 GMT tomorrow.

Various legal scholars predict that the court will approve the ESM but insert significant constraints on its operations. A commonly held view, for example, is that it will limit Germany’s maximum contribution to the fund at EUR190 billion–in keeping with the country’s pro-rated weighting within the facility’s $700 billion in paid-up capital–and give the Bundestag, Germany’s parliament, effective veto power over ESM operations.

This wouldn’t exactly be a market-friendly outcome.