Re: nincs cím

Itt az idő, hogy vegyék az eurót, ha.....

It's time to buy the Euro, if...

A crazy thought, perhaps, but is it time to buy the Euro on the announcement of a deal for Greece? It would really be sticking our necks out to say yes, so instead, we'll wimp out and say "yes, but with a couple of conditions". The first condition is that sovereign CDS prices and intra-EuroZone debt spreads calm appreciably for the rest of the week in into the beginning of the next week in the wake of the probably deal in the coming few days. This is obviously the most important pre-condition, as we have shown many times recently the correlation between the sovereign debt worries and broad Euro weakness.

The second important pre-condition for a EUR/commodity currency rally is flat to declining equity market. We're not suggesting all-out panic is needed, just a continuation of the recent flattening, with much more upside for Euro if we see another 5% or so of downside in equities beyond recent lows. On the other hand, If we see equities and commodities bounding higher from here again and European sovereign debt risks only settling down slightly (and perhaps Euro-wide CDS prices rising as the market judges the risk to merely have been spread around in Europe rather than avoided), then we could be in more another several weeks to couple of months of EURAUD downside. But AUD and CAD are still woefully overvalued vs. the single currency, and this is more a question of when the rally will take place rather than whether.