After trading just above 1000 last night in the S&P futures, a rally in Asian stocks that spilled over into Europe has reversed the mood. China closed Monday at the lowest level since Apr ’09 but bounced Tuesday by almost 2% as Ag Bank is expected to price their IPO tonight with what is expected to be healthy demand. With 2 1/2 weeks to go before the release of the European bank stress tests, on Sunday the French Finance Minister Lagarde said they will show that “banks in Europe are solid and healthy” and specifically with French banks she said “I’m not worried about my banks.” European bank stocks are rallying sharply this morning and the Spanish rally in particular has their 5 yr CDS down to 2 week lows. For a 2nd straight meeting and after 150 bps of hikes since last ’09, the RBAustralia left rates unch at 4.5% as expected. The June ISM services index is the last major economic # ahead of earnings season next week.