Yesterday's EU/IMF $1 trillion reaction sent risky assets into orbit. Spain's stock exchange rose 14.4%, Greece's 2 yr debt dropped below 5% and the EURUSD briefly traded up to 1.3089. But like the morning after a long night of partying, investors seem to be regretting yesterday's buying frenzy. The bailout package is being viewed today by the numbers and not emotions. As we suspected, investors are realizing the bailout is adequate to address the short-term problems of Greece & Co., but the long term implications remain unclear. Economists are highlighting the fact that the cost of the bailout is not only financial - the austerity measures must hinder EU growth in the future and in essence will further saddle debt-burdened nations with you guessed it, even more debt. In addition, the ECB's policy reversal on intervening directly in bond markets, although initially a positive, will be highly Euro negative as it continues. Although the sterilization of the ECB purchases has been mentioned, the finer points of the process remain hidden from investors. As the ECB continues its fully-engaged quantitative easing, we suspect Gold will be heading higher. Overall, we are still bearish on the EURUSD as the market will be unforgiving to any negative EU data, while comparably the US enjoys positive momentum. The final nail on a macro-level, is that there is little hope the Euro will enjoy any rate-differential advantages in the years to come. Just above Europe in the UK, the newfound willingness of the Liberal Dems to possibly back Labour has considerably increased political uncertainty. In the short term, this will be a sterling negative, but over a slightly-longer term we hold the UK as a better bet than the EU, thus shorting EURGBP looks attractive. Over in Asia, we see that yesterday's risk appetite was further eroded by the release of some Chinese data. China's CPI y/y came out at 2.8% - higher than the expected 2.7% and well ahead of its previous 2.4%. Industrial production numbers were 17.8% y/y against an anticipated 18.5%. The trends in the data suggest Chinese inflation is on the rise while domestic production is slowing down. To steady China, policy makers will have to tighten monetary policy to avert any further drifting, which we forecast will occur in Q3/Q4.