Stocks were up 330 points yesterday on hopes that French President Sarkozy and German Chancellor Merkel are finally getting serious about resolving the euro zone financial crisis. The two leaders vowed to offer a joint plan within the next few weeks to bolster European banks, and to do whatever it takes. They did not address how they will deal with Greece which is a separate, but connected, issue.
Watching CNBC this morning the question was asked, “How does Slovakia affect the global financial system”? The answer is, Slovakia is the last of the 17 euro zone countries to vote on expanding the European Financial Stability Fund, and if approved, all EU members would have voted in favor of expanding the fund to help contain the financial market stress.
The positive news coming out of Europe this weekend and again this morning is leading U.S. Treasury prices lower/interest rates higher, and later today, the U.S. Treasury will auction $33 billion of 3 year notes, which could put additional pressure on bonds. The yield on the 10 year note has risen to 2.14% this morning and mortgage prices are worse by approximately .25%.
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