The EU laid the ground work for a Euro TARP program yesterday. This is a good first step but it will be impossible for the crisis to lessen without the help of the ECB. In their last meeting the ECB did nothing. Many believe the reason they did nothing was because they wanted EU leaders to act and if they would have eased market tensions their would be less of an incentive for EU leaders to act. It seems the ECB have gotten their wish.
The EU leaders have done all they can do. It is time for the ECB to lend a helping hand. The ECB meets on July 5 when a rate cut is expected. There will need to be help on the liquidity front with LTRO III or bond buying. If they help with liquidity there is a fighting chance that this plan can work.
From a trading perspective there are no easy trades. We are neither very overbought or oversold and sentiment is mixed. We are getting closer to the top end of the range we have been trading in.