EU Euphoria turns into market rally!

U.S. equity futures (/ES) soared this morning as the result of deals that were reached among Greek bondholders and European leaders. The bondholders agreed to a 50% haircut, and the rescue fund’s capacity was increased to $1.4T. In The US, investors continue to cheer the third quarter earnings reports and the recent string of stable economic data.

Today investors will be watching the Weekly Jobless Claims data, GDP report, pending home sales data and natural gas inventory report. The U.S. Dollar (/DX) is sharply lower as equities take off higher. Treasuries are continuing their recent slide also as investors pile back into the ‘Risk Trade’, which is long equities and short bonds. The CBOE Volatility Index (VIX) is falling sharply today as investor fear over the Euro-Zone crisis has been muted. Tomorrow brings more US economic data as reports on Personal Income, the Employment Cost Index (ECI) and Consumer Sentiment are due.

With all the euphoria over the EU debt mop up, we are waiting for a light pullback to get clients back into the market after a long patch of conservative positioning.