“The euro needs to be kept stable,” German Chancellor Angela Merkel said at a press conference held before the G20 meeting in Cannes. “We want to achieve this rather with Greece than without Greece. But the task of maintaining the stability of the euro as a currency must be the primary task and the priority.”

In the event that Greece does not proceed with the bailout package agreed upon at last week’s EU Summit, the debt-ridden nation will be the first country to exit the European Union. Merkel explained: “The referendum will revolve around nothing less than the question: does Greece want to stay in the euro, yes or no?”

French President Nicolas Sarkozy added that Greece would not receive further aid if Greece chose to renege on the debt crisis plan.

Greek Prime Minister George Papandreou will be facing a confidence vote tomorrow. A recent survey suggests that over 70% of Greeks would prefer to maintain European Union membership.

With the European Central Bank meeting on November 3, there is some speculation of a potential interest rate cut. A Bloomberg Survey published on October 28 showed that, of 54 economists, 2 expected a 50 bps reduction this week and 4 expected a 25 bps rate cut. While there is the expectation of a rate cut before the end of the year, there is also a credible argument for maintaining the status quo with this meeting. It is believed that, given that this is Mario Draghi’s first meeting as president of the ECB, a rate reduction is unlikely. Mario Draghi takes over as ECB president after six years as head of the Bank of Italy.

Even with my bearish near-term view for the Euro, I see potential for the EUR/USD to rise further if the markets believe that another round of quantitative easing (QE3) is imminent.

The effects of the earthquake were devastating in Japan, but it was also acknowledged that its effects would be felt globally. Economists reduced their growth projections to compensate for the reduction in exports by Japan. Months later, the hyper-sensitive post-credit crisis markets simply were not prepared to hear what we had all expected: growth was slowing. And while the events were widely predicted, the fears of a double-dip recession took charge and pushed market sentiment downwards. Now, more than 7 months after the disaster, the frequency of positive surprises in economic reports, coupled with the astonishing returns of the past month in the S&P 500 suggests that perhaps there may be a link and our economic plight might not be as bad as we had once thought.

It is my goal to keep this blog current and ever changing to serve you, my reader, better. It is with this in mind, however, that I will note that I refuse to write for the sake of writing. I will not be faced with lowering the standards of my commentary in order to meet a production quota. Instead, it is my pledge to offer only content that I feel truly adds value to your trading day. Once again, thank you for reading and I hope you will check back soon for more.