The enthusiasm over the lower house approval in Germany’s Parliament of the euro bailout plan lasted exactly one minute as we await the upper house. A sell on the news is the only reason I can come up with (yes vote was widely anticipated) or a bout with reality as it’s never good that we even got to this point and the problem of too much debt has not been dealt with. The ECB Vice Pres said “money and credit growth lies at the heart of most boom and bust cycles” and therefore they won’t have an “over activist” monetary policy. If only our Fed heeded that. Also of focus was the weaker than expected data out at 4am in Europe. German’s May IFO business confidence # was a touch below expectations even though it’s the 2nd highest figure since mid ’08. The May Euro Zone services and manufacturing composite index was 1 pt below estimates. US$ 3 mo LIBOR rose to .497, another fresh 10 month high.
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