The world is sitting on piles of tinder. Two of the potential dangers have passed in the last seven days. The Brexit vote has taken place and the Spanish elections have finished without any new disruption to the European political scene. In fact, Spain was interesting as Spanish voters seemed to be afraid of a Brexit-type market reaction and moved more support to the center-right as a vote for the known.
BUT TODAY THE ECB HAS POTENTIALLY IGNITED THE FLAMES OF GERMAN ANGER AS DRAGHI MOVED FOR THE QE PROGRAM TO BUY LOWER GRADE DEBT. THEY HAVE RUN OUT OF HIGH QUALITY BONDS TO BUY. This will not sit well with the AfD supporters in Deutschland. There were massive moves in the European sovereign spreads after the news release and more will certainly follow as the program becomes clearer.