The sweet smell of free and unlimited central bank money seems to be losing is odour as the markets are waking up to the noise in the streets from protesting Greeks and Spaniards.
With the protests going on in Madrid, the Spanish bank stress testers are working out the final details of just how much money the institutions will need to restore their solvency and the results come out tomorrow. Some say it's €60 billion, some say €100billion. Three months ago EU leaders agreed a bank-specific bailout package that would cover either amount but this week the forces of darkness have stuck a bag of spanners in the works.
The latest spanner comes from a move to prevent the European Stability Mechanism providing money directly to Spanish banks because their bad loans represent "legacy assets" from previous banking crises. In the opinion of Germany, Holland and Finland, ESM support can only go to offset new problems. If so, the money will have to pass via the Spanish government and even then only after Madrid has requested a bailout and submitted itself to the audits and austerity that come attached to a rescue.
Reading this you could be forgiven for thinking it was a day of panic on the FX markets yesterday but it wasn't. The Euro lost just a quarter of a cent against the US Dollar and held steady against the Yen and Sterling.
This morning the Eurozone reports it's latest indices for business and economic sentiment while from the US durable goods orders, pending home sales and weekly jobless claims come after lunch.
Of greatest interest will be the revised figures for UK and US second quarter gross domestic product (GDP). America's economy is expected to have grown by an annualised 1.7% and Britain's to have shrunk by a quarterly -0.4%.
The GDP numbers will probably not affect the value of either Sterling or the US Dollar unless they are well adrift from forecast.
Conceived with Ambition