The Euro currency is at a five day high against the U$. Who would have thought? Well, we did. You can watch the BNN Video here: http://highrockcapital.ca/in-the-news.html.
On the show, I discuss the fact that the Euro has been artificially held down by the very fact that Greece is a part of it. They have strong nations like Germany and weak nations like Greece...take out the week(est) nation and you have a stronger Euro.
What does this mean for European stocks and bonds? Well, at a 30,000ft view, European stocks have looked very expensive to us at ~+16% YTD as of last Friday. Given the Euro will likely now strengthen, then the stronger nations like Germany will need to learn to adjust their export machine to a stronger Euro which will hamper exports. That means a slower growth profile in Europe. That means lower stocks, That means higher core European gov't bonds (like German Bunds).