IFR Markets Analyst Adam Parry paints an excellent picture on the present trading psyche:
The most likely scenario is that Moody's junks Spain. That would start to see the Spanish bonds being pulled from sovereign benchmark indices, leading to some forced fund liquidation of paper. That will inevitably lead to some widening of Spanish spreads. The main trigger that will force Spanish PM Mariano Rajoy to go cap in hand to the ECB will be a sustained rise in Spanish yields. And we know, at current levels that is not the case. Any knee-jerk widening of Spanish yields - say back to the levels at the end of July - will almost certainly bring an end to the stand-off between the Spanish government and the ECB, activating the OMT and resulting in a deluge of bond buying.
I feel personally that the Euro is still seen as a good buy, what are your thoughts?