News moves markets and it’s time for good newsEquity markets have been starved of positive news flow. So the push by eurozone leaders, led by Mrs Merkel and Mr Sarkozy, along with the involvement of eurozone finance ministers, the European Commission (EC) and the European Banking Association (EBA), to engage in what appears to be a new constructive phase to deal with the eurozone sovereign debt crisis, is a very welcome development.
However, will they dare to be so bold? The chart suggests that the markets are turning hopeful. The goodies they need to deliver include a more ably resourced crisis mechanism in the form of the EFSF, the programme of bank re-capitalizations discussed last week by the EC and EBA, a solution for Greece (widely expected to include debt restructuring) and a scheme for economic governance that builds on or endorses such a framework set out already by the EC for the broader EU. More >