Trichet’s comments seem less hawkish than the market had anticipated and the euro is coming off sharply. While recognizing policy remains accommodative, he is using none of the word cues that point to a June hike. Euribor yields has fallen 8-13 bp in response to that. He said that price pressures are not broad-based. This is forcing the market to reconsider the tightening path. Risks, he says, remain to the upside, and his Q&A that follows shortly may be more pointed. A July rate hike is still the most likely scenario. With the market also thinking that Italy’s Draghi is the most probable successor to Trichet, a rate hike in Q4 also seems to be a likely scenario. US rates are also falling, so the decline in euribor is not fully being reflected in the spreads. Support has yet to be found as late euro longs appear to be bailing out. Although hourly momentum indicators are overstretched, euro potential is now toward $1.4660.