Surprising Euro Strength

  • Italian public finances are rapidly becoming unsustainable without the ECB buying large quantities of its debt, the Merkel/Macron plan is no alternative.
  • Without ECB buying large quantities of Italian debt, the eurozone would implode, which is the last thing the world economy needs right now.
  • But the ECB is hamstrung by internal divisions and a damning ruling from the German Constitutional Court.
  • Surprisingly, this situation actually leads to some euro strength.
  • But the underlying tensions and fragility of the system very much remain, so we wouldn’t get too comfortable with that.

Source: Surprising Euro Strength | Seeking Alpha