httpvh://www.youtube.com/watch?v=jYlhHTyD638

The planned European bailout for Greece was obviously the story of the day yesterday with the euro, Greek debt and risky assets in general shaking off their fears and enjoying a day in the sun. I doubt it will last.

The plan, while seemingly agreed, now needs to be sold to each individual country. The German parliament are going to be apoplectic with the news that the loans will not be at the market rate they wanted and could torpedo the whole endeavor. Greece and the euro are by no means out of the woods.

Given the potential for a deal and the subsequent leap into risky assets, the haven side of things was dealt a blow yesterday. The US dollar moved to its lowest level on a trade weighted basis for a month later finishing 0.6% lower.

Yesterday was the first day of US earnings season with Alcoa, the aluminium producer, kicking things off in disappointing fashion. We do expect that earnings season will be volatile but in the end will have little effect on FX markets.

The impact of UK politics has been slight in the previous days with the latest poll showing that Cameron is still 6 points ahead in the polls, not enough for an overall majority and therefore still in hung parliament territory.