Markets rally on

EU-solution rumors

After a dismal start on the trading week, rumors on a French-German agreement on increasing the emergency fund for sovereign debt and bank recapitalization to 2 Trillion Euros, spurred a strong world market rally initiated in US where Dow rose 1,58 and Nasdaq 1,63 %. Asian markets jump, and European futures are pointing up. US futures are down on disappointing quarterly results also from Apple. Finance and banking shares have recovered. Bank of America is up 7 %.

The rumors from Europe has led to a strong rebound in the EURO. Euro/USD trading at 1.3812. Oil prices are up; NYMEX at 88 and Brent on 111 levels. Greece is facing a Parliamentarian vote on continued austerity measures on Thursday. All Greece is on strike. Premier Papandreou is seeing the vote as decisive to avoid default. Moodys has downgraded Spain credit rating. This does not, however, place Spain on the same credit standing as Greece, Europe and Portugal.

In spite of some renewed market optimism, Angela Merkel yesterday repeated that the European credit crisis is deep rooted and shall be with the markets for a long time to come.