Those who walk away are probably still long dollars - Socgen

Kit Juckes, economist at Societe Generale explained that the Eurozone has seen DBRS downgrade Italy's rating, removing the last remaining single-A rating from the country. 

Key Quotes:

"That will have implications for the haircut on Italian debt posted as collateral with the ECB. It's only a marginal negative for the Euro but it definitely isn't a positive factor."

"President-elect Trump continues to make disparaging comments about the durability of the EU, but markets seem content to ignore those."

"We get the ECB bank lending survey tomorrow and a likely uneventful ECB meeting on Thursday, but it is still likely to be a combination of renewed widening in yield differentials and a ramping-up of nervousness ahead of the French elections which will be the catalyst for renewed Euro weakness when that happens."

"We're still short EUR/SEK and EUR/NOK. The choppiness of the most heavily traded pairs, like EUR/USD, USD/JPY and GBP/USD, not to mention the recent moves in equities and bonds, is making life difficult for anyone who doesn't just put positions in place and walk away. Those who do just walk away are probably the ones still long dollars, short Treasuries and waiting for President Trump to begin his first hundred days in office."