It seems the the Chinese government will allow the Yuan to appreciate slowly. The US have been pressing for this for many years to try and rebalance their trade with China. Coming on top of Euro uncertainties it must make for a more volatile situation. Simplistically it should reduce overseas demand for Chinese goods and make Chinese imports cheaper. It will thus push up the demand in China for oil. Ho-hum, and with Obama restricting oil supply through drilling bans and ass kicking of oil companies the price of crude will be going up anyway. The Yanks had better be careful. The one thing the Chinese also have is a corrupt and inefficient banking system. Bad news in a country with a huge current property price bubble.
Back in Euroland stories are starting to emerge of covered up Spanish bank problems, two were facing collapse in early May along with very high levels of bank stress as measured by Euribor derivatives and EONIA swaps, hence the incredible increasing bank rescue package at that time. Learn a lesson as the politicians say but never do, whatever the ECB says is happening the truth is always much worse. Even helped slightly by a Chinese revaluation it is difficult to see anything but years of economic misery ahead in Euroland.
Politically Merkel's government looks finished. The Germans are not going to go on paying for the profligate PIIGS. The PIIGS cannot get out of the mire without a devaluation. The Franco-Prussians won't allow that. The Dutch right winger Geert Wilders is now the second force in Holland a country with a huge Muslim problem. Flemish separatists have won the Belgian elections in Flanders. Its going to take trillions of Euro bond purchase to stabilise the economic situations. The Germans saw the first small tranche of bond purchases by the ECB as 'a threat to stability'.
I opine that when the boy David visits his new found EU friends in the Autumn he will be faced with huge pressure for further integration and more powers to Brussels. Will he be able to resist these demands. I don't think so.