What next
1) The writing of the MoU needs to be finalised.

2) The IMF Executive Board needs to approve its portion of the loan.

3) The MoU needs to be approved by Ireland. The finance minister has said earlier that he thought he had the authority to sign a loan deal, but that he was seeking legal opinion. Politically, however, it would be difficult not to put this to a parliamentary vote. We don't know whether this will be before or after the 2011 Budget vote on December 7.

4) Keep watching the pressure on Portugal and Spain. The Irish programme looks good for the stability and sustainability of its banks and is therefore good for the sovereign. The EU's avoidance of cram-down on senior bank debt is good news for European bank funding in general. The further clarification on the scope of the sovereign debt default clause under consideration by the EU is also positive (for example, haircuts will not be automatic). Nevertheless, from a macroeconomic perspective we remain cautious on Portugal; we remain constructive on Spain.

Eoin Treacy's view While the Irish negotiations have moved one step closer to unlocking funds to support the country's ailing financial sector, yesterday's announcement has failed to quell speculation that the Eurozone's debt problems cannot be contained within the periphery.

The Dow Jones Euro Stoxx Banks Index, heavily weighted by Santander, remains in a medium-term downtrend. It is now testing the June lows near 150 and a sustained move above 200 would be required to question the consistency of the decline.

Greek spreads remains elevated but steady while Irish, Portuguese, Spanish and Italian spreads over Bunds continue to post new highs. At least in part because of the lack of faith in the current bailout mechanism, the Euro came under additional selling pressure today; falling to $1.31. Taking a medium-term view the failure near $1.40 three weeks ago marks a third lower rally high which would need to be surmounted to question the relatively gradual return of US Dollar dominance.