Talking Points:
• News that the ECB was withdrawing a waiver for Greek bank liquidity sent the Euro tumbling
• The new bout of financial uncertainty upset the delicate balance of risk rebound for the likes of the SPX
• Will Euro troubles prove the catalyst for broader risk aversion, meanwhile EURJPY is exposed to both
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The pressure has been building behind investors' rosy assessment of the investing environment for some time, but we have yet to reach the tipping point. A collapse in the the fragile risk-reward assessment looks almost inevitable, but the day of reckoning has been regularly pushed back and further gains have been squeezed out in certain areas. Perhaps a singular catalyst will finally pierce the veil of complacency, but what will it be? With the S&P 500 in the middle of a range-based rebound on volatility retreat, the market's calm was shaken this past session on news of a new Euro-area trouble: a liquidity source for Greece being withdrawn by the ECB. Will this region prove the spark that ignites the dry powder? In the meantime, Euro pressure and speculative uncertainty is keeping EURJPY in particular active. We look at these themes and its market impact in today's Trading Video.
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