Lots have been speculated and written about what ECB can and will do. My own take from different media is the following.
1. ECB will intervene to support the Euro in open market without warning. I expect this to happen in the in the 1.2050 area where the first intervention I think happened at July 25. ECB's Mr Draghi has said now that it will be "pointless to short the Euro from now on." - I believe strongly that the ECB can hold the Euro up. The Bundesbank in Germany has since 1983 been seen as the smartest currency trader.
2. Spain and Italy has not asked for help to hold interest rates down on their bonds. They both say they will not need money from the ECB. The German finance minister who met Mr Geithner Sunday, have said he does not expect any money beside the 100.000 € for Spain's banks to be given out for bonds until earliest next year.
3. Interest rates has been on hold this week in the US, England and Europe.
My conclusions are that holding the Euro at current price or higher will stabilize the bond markets in Europe. Calm down speculations in the media and making daily updates of Spain's bond rates less interesting. The stock markets will concentrate more on economic fundamentals, demand and employment.
1. ECB will intervene to support the Euro in open market without warning. I expect this to happen in the in the 1.2050 area where the first intervention I think happened at July 25. ECB's Mr Draghi has said now that it will be "pointless to short the Euro from now on." - I believe strongly that the ECB can hold the Euro up. The Bundesbank in Germany has since 1983 been seen as the smartest currency trader.
2. Spain and Italy has not asked for help to hold interest rates down on their bonds. They both say they will not need money from the ECB. The German finance minister who met Mr Geithner Sunday, have said he does not expect any money beside the 100.000 € for Spain's banks to be given out for bonds until earliest next year.
3. Interest rates has been on hold this week in the US, England and Europe.
My conclusions are that holding the Euro at current price or higher will stabilize the bond markets in Europe. Calm down speculations in the media and making daily updates of Spain's bond rates less interesting. The stock markets will concentrate more on economic fundamentals, demand and employment.
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