The markets are casting away the shadows of risk aversion and only one spark from Trichet is all that is needed to ignite the rally. But can Trichet deliver? The markets believe so but I doubt so. Given that the formation of Euro is based on each individual component country of European Union losing their monetary and fiscal independence. Can he do what the markets want him to do? Firstly the European Union isn’t a homogeneous entity. The core and the periphery is quite obviously segregated. What is in the interest of Germany and France may not be for Spain and Italy or Ireland and Portugal. The compromises that Trichet manage to extract out of such a diverse group is already impressive enough. Financial markets tend to sway from extreme optimisim to extreme pessimism. The Middle of the Road is unheard of. I won’t be surprise if the market will be disappointed.

I feel that it is wise not to be overtly euphoric when the going gets better, hence rather not make a bet on the best circumstances, hedge against any bad news. Remember that though Ireland had a bailout package, their parliament has a majority of only 2. Prepare for the worse while hoping for the best is something I would strongly advice any investors. You can make a bet that Trichet speech will be advantageous but make sure you don’t bet your family fortune on it.