I thought IMF bullets had more bang

The next step is to wait for some clarity from the IMF about who may access the latest bailout facility, dubbed the Precautionary and Liquidity Line. The statement says it is to be available to “crisis bystanders” with “relatively strong policies and fundamentals”.

The wording seems to rule out the PIIGS because if they’re bystanders then who isn’t? But it wouldn’t take a Clinton-esque juggling of definitions to include Italy, Spain or Portugal if needed.

But I believe the market knows that, which is why the 50 pip pop (followed by a 30 pip slide) in EUR/USD is so disappointing. Given the quota, even the potential for $123B in low-interest loans to Italy has failed to spark hardly any positive response.

I’m not there yet but at this point every trader has to be ready for the situation could turn ugly at any point; A massive USD rally, EUR/USD to 1.20 in a flash and stocks down 20%.