Marketwatch: Waiting for the Politicians, Again
Posted by admin on December 6, 2011
So Merkozy, as Merkel and Sarkozy are now so fondly called, have agreed on the outline of greater European integration. That’s a step forward, but the only things that matter to the market are (1) whether the ECB will buy bonds; and (2) what the size of a bailout package might be – either through the European Financial Stability Facility (EFSF), or through some convoluted IMF mechanism. So this Friday, after a meeting of European ministers, we should find out what the reaction of the Europeans is to the Merkozy proposal. The key is after – what the ECB will do. At the moment, the market is bullish with hope. If the ECB doesn’t move enough after Friday, or if the ECB comes out with a process that the market thinks will take too long to execute, the market will decline. The ECB has hinted at stronger action, so expectations are high.
Filed Under: General