While we await the confidence vote in Greece after the US market close, a likely new government in the month to follow, and hopefully an agreement with Greek bondholders to mark their debt to 50 cents on the euro, RBS became the 1st bank to market their holdings of Greek debt to reality at 37 cents on the euro as they reported earnings today. Monday will hopefully bring more clarity on the form a leveraged EFSF will take but final details will take time and markets know the entity will just deal with the symptoms and not the disease of too much debt. Italian bonds are still trading poorly notwithstanding the ECB rate cut after Italian services index fell to 43.9 from 45.8, the weakest since June ’09. The Oct euro zone region services and mfr’g composite index was revised down to 46.5. German factory orders in Sept unexpectedly fell by 4.3%, the 3rd month in a row of declines. Canada reported a much weaker than expected Oct jobs report as payrolls fell by 54k vs an estimated gain of 15k. It’s the biggest drop since Feb ’09. US payrolls are expected to rise by 95k. In response to US pressure at G20, the Chinese yuan rose to a new high for the 2nd straight day.
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