Was not this move you have been talking about to happen right after the EP elections? What has changed?
“While everyone will focus on interest rates, at the end of the summer we will see a refocus back on the structural problems in the Euro.”
ANSWER: Nothing. What is happening is that we are running into reality. The entire Quantitative Easing has completely failed. The focus on interest rates has been lost insofar as we are dealing with a major question of a structural crisis. Mario Draghi’s term ends in October and there is going to be a real crisis in structure. Draghi’s Portugal statement was him trying to bully the rest of the board but that did not work. This conflict gave a boost to the Euro but the model had been calling for a rally into July after the elections which we have seen also in gold.
We face interesting times ahead.