The massive contagion from the small periphery to the big bond markets of Italy and Spain has turned into ‘the’ real problem for policy makers. This is what happens when you treat the symptoms and not the cause. All along the Eurozone has needed strong leadership-demands it, without it, global capital markets are capable of picking ‘off’ one country at a time.

Lagarde’s comments that the IMF is ‘not at the stage of discussing conditions and terms’ for a new Greek package and ‘nothing should be taken for granted’ has given London the green light to compound the EUR’s worries. It’s import that all policy makers should at least be reading from the same script to instill market confidence.
 
Negative headlines on Greece continue to dominate markets and with the EU finance ministers failing to agree a resolution for a second Greek bailout yesterday has investors continuing to price in a tail risk of a Greek default until we see a swift response from ‘someone in charge’.

The US$ is stronger in the O/N trading session. Currently, it is higher against 13 of the 16 most actively traded currencies in a ‘volatile’ session.

Great headline which just about sums it all up! Euro & general forex market news roundup.