London (AFP) - European stocks rallied Monday on optimism over quantitative easing in the eurozone, with Frankfurt topping 12,000 points for the first time, but the euro struck another 12-year dollar low.
Political tumult in Greece, plunging stock and bond markets, the threat of default and exit from the euro: the script is eerily similar to the nightmare scenarios of 2010 and 2011.
Debt-infested Greece skidded close to the edge then, saved by 240 billion euros (US$297 billion) in emergency loans improvised by European governments led by a reluctant Germany. Now, after achieving some signs of economic recovery, the government in Athens is again teetering, provoking a fresh round of doomsday speculation.
LONDON: World bond and stock markets rose on Friday after a bruising week and sterling surged to a two-month high after the business-friendly Conservative party won Britain's parliamentary election. Sterling leapt 1.3 percent against the dollar and London's FTSE led equity markets with a 1.9 percent jump to help European shares rebound from two-month lows and wipe out what had looked like being a second week of losses.
France has encouraged Spain to apply for aid as soon as possible. In Germany, Wolfgang Schäuble wants anything but a timely application.
Note that unless a country requests a bailout, and agrees to terms set by the IMF (something Spain does not want to do), the entire OMT plan of Draghi is useless.
Finally, at the latest EU finance meeting on Saturday, battles between eurozone and non-eurozone countries erupted over the banking union.
Government borrowing costs – as measured by 10-year sovereign bond yields – are hitting record lows across the euro zone "core" today. In France, 10-year yields have fallen to 1.75 percent. The Belgian 10-year is at 1.95 percent, the Dutch 10-year is at 1.62 percent, and the Austrian 10-year is at 1.49 percent.
It's a love-fest in Asia futures once again, but will it hold on Friday or through the weekend?
One thing's for sure, sentiment was so sour about this 19th summit, that any bit of good news stood a decent chance of temporarily igniting the market.
You can actually credit German chancellor Angela Merkel for that sour sentiment because she repeatedly stated Germany would not give in. The latest reports suggest Germany did blink, but not enough to please Italy, Spain, and France.