Why did the euro rally the last few sessions? Ireland was gonna take a bailout…Job done….Catastrophe averted.
Now, with the government likely to fall and Irish public opinion toward the bailout toxic, we likely will have another 8-10 weeks of rampant uncertainty.
What’s the market gonna do to fill the void? Wait patiently for the Irish electorate to choose a new government who will then swiftly negotiate a deal with the EU/IMF? Not bloody likely…
Contagion will be a ragin’ during the most illiquid time of the year. Better grab some options because volatility is surely going to be sky-high.