France’s Sarkozy left “no doubt” in comments over the weekend that the EU stands behind Greece in its attempt to restructure and pay/refinance its debts. There was also talk of the creation of a European Monetary Fund which would recreate a version of the IMF for the Euro region to help those members under financial stress. Greek 2 yr yields and their 5 yr CDS are both at the lowest in 6+ weeks and Greek stocks are at 6+ week highs. The other troubled debt situation in the world (among others), Dubai, is also seeing a bounce in its stock market and a narrowing of CDS after the FT reported that Dubai World this week wants to begin discussions this week on restructuring $22b of debt. With regards to steps in China to cool parts of their economy and the global concerns it has engendered, a PBOC official said specifically that the rise in reserve requirements is not meant to tighten policy but to just remove some “extremely loose” policy.