Will a Bernanke-lookalike arrive on the scene in Europe?

!! Outlook !!
The data to be looked at today includes the weekly jobless claims. We
say you can't make bricks out of that straw. Tomorrow's retail
sales and inflation will be more important. Today, more important and
claims is the Reuters report that US foreclosures have reached the 1
million mark, despite a slowdown in recent months due to bad paperwork
by banks. AIG is preparing to go to the market to raise funds to pay
back the government for its bailout. Also interesting if not exactly
relevant to the FX world is Pres Obama calling for more civility in
public discourse and the press ganging up against Palin for not
knowing the meaning of important phrases like "blood libel." Well,
we already knew she was pig-ignorant about history. In Europe,
Bloomberg reminds us that Trichet's tenure is supposed to end in
October, an awkward time with the role of the ECB still evolving. The
Bloomberg survey has a majority of economists forecasting a rate hike
in Q4, but it would likely be under someone else's leadership. It
would also be the first hike in three years, a "historic" moment.
The betting today is that former front-runner BBK chief Weber lacks
the diplomatic skills for the job.

Replacing Trichet is going to be a really interesting saga. Trichet
disapproves of the ECB intervening by buying potentially distressed
bonds, but he holds his nose and does it anyway. Sometime before
October the exact role of the ECB will have to be defined. Bernanke
has said the Fed cannot legally and will not in practice rescue states
and cities. Will a Bernanke-lookalike arrive on the scene in Europe?
Lender of last resort is one thing but bond-buyer of last resort quite
another. We guess that for the ECB to restore long-lasting and
sustainable credibility, it will have to clarify in lurid detail
exactly how much intervention it is prepared to do, if any, and stick
to it. Yes, this is waving a red flag in front of the bull.

It looks like Europe has once again managed to pull its feet from the
fire at the last minute and to do it with words. We shouldn't be
surprised—people have a big well of respect for the eurozone
experiment, not least because the fiscal concepts embedded in the
treaties are indeed a form of gold standard for fiscal behavior. In a
world without an actual gold standard, this is a powerful thing. We
are at somewhat of a loss to name an ending point (along with everyone
else) for the euro upmove. Shorts that now need to be covered are
probably not that big, so it's a question of whether optimism (and
rising inflation) get behind the end-of-year ECB rate hike idea and
how much bad news comes out about the US. Let's try 1.3350, the
channel top on the 360-minute bar.
Source: Fxstreet.com