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Forex Flash: Post-Cyprus: gradual Euro weakness remains the central case - Nomura

Nomura strategist Jens Nordvig notes that news from Cyprus this weekend was substantially better than the initial bailout news from the last weekend.

He feels that it seems that t system wide deposit haircuts have been avoided. In addition, issues related to capital controls may also be less problematic than initially feared. But these are tactical considerations. He feels that the medium-term picture remains Euro negative and the recent news flow points to more pronounced Eurozone growth under performance and the Eurozone banking system is not showing any clear evidence of improvement. He finishes by commenting that, “In fact, it seems that the negative feedback loop between weak growth and banking sector fragility remains in place, despite more resilient sovereign bond markets. Moreover, the Dutch statement in relation to bank resolution is not going to be helpful for markets and lending conditions in the near-term.”

Forex Flash: Many continue to underestimate the political will behind EMU - BBH

Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman believes that many observers seem to chronically underestimate the level of political will of the European elites for EMU to succeed.
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Forex Flash: For EMU to survive, it will take a German shape - BBH

Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman notes that in order for the EMU to survive, it will be shaped by the most powerful interest, which is Germany.
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