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Following a strong day for the Euro is the auction of €1.2 bn worth of 6m and 12m Greek T-bills which will provide the main movement in todays markets as Greece tests confidence hoping to find sufficient investor demand. If the sale goes well, look for the Euro to strengthen as bailout plans from the EU/IMF would be shelved. On the other hand, a weak or failed auction would put further strain on Greece’s finances and with the bailout plan still being finalised, a Euro sell-off would be imminent with traders looking back to Fridays 1.1450 levels against Sterling and 1.33 on Euro/dollar.

In the UK, business leaders have slammed Labours party manifesto for not taking enough action in cutting the country’s deficit. Meanwhile, the Conservatives will be announcing their manifesto today following plans by Tories to scrap the FSA and hand most of the powers to the Bank of England. The general consensus in the City seems to be victory for Cameron and co will produce more decisive measures in cutting the deficit and getting the country back on track. Overnight data from the BRC shows Retails Sales YoY increased 4.40% providing bullish news for the struggling retail sector.

With the Eurozone slipping on Greece and politics in the UK grabbing the limelight, the US markets have continued to surge higher with the Dow Jones getting back above the psychological level of 11,000. Expect the US back in the news this week with ample volatility in the Greenback. Today brings the US Trade Balance number with Retails Sales, CPI data and the FED Chairman Ben Bernanke due tomorrow and the initial jobless claims out Thursday.

Still, the bond auction from Greece will be the key for today’s trading as they look to avoid another tragedy.

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