An excerpt from this morning’s notebook ramblings:

What has happened in Europe? Institutions appear incapable of reacting until the last minute — and then they do, staving off crisis for the time being. So the question is, when is the last minute? 

In the case of Greece — next year, when it is supposed to return to the markets. So this whole thing can drag on and on. The market is likely to get bored and focus on the rate story before a catalyst for action is hit. That means the EUR should remain in a volatile uptrend, pushed down from time to time on Greek concerns. 

There is also the potential for things to worsen in the other PIIGS — that could change the trend. But I don’t think the Greek situation will change the EUR uptrend. 

What else could change it? A serious risk-off phase, driven by the end of QE. That would mean USD strength, and it is a real possibility — so I am not inclined to go long the EUR.