IIFT Daily Note with Peter Brown

Santa may come early!

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Well looks like we got a deal from Brussels last night. How big we don’t know but a deal nonetheless. Together with a plan to bail out Spanish banks direct from the EFSF initially and then the ESM, without involving the Sovereign, is pretty good news all round.

Why the muted response? Well the German court may reject the ESM putting a hole in the plan.

Trading wise we may get a rally. The key will be Spanish bonds. First thing they are still above 7%, where they go  from here and the market reaction is the key. A move below 7% is needed to rally the markets.

Key levels are 1.2325 on the Euro topside and 1.2270 below.

1343 and 1353 on the S&P.  I favour the top side for a few days provided the German court don’t sink it.

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