Europe will once again decide in how Wall Street will change this week, culminating in a European summit expected to make a definitive solution to the debt crisis that has shaken the euro area for nearly two years.
Last week, the U.S. stock market recorded its best performance since March 2009 in favor of such hopes for this crisis finally resolved.
If all goes according to plan concocted by Paris and Berlin, the EU has indeed made a big step towards a union budget Friday night, with agreement on a change of European treaties including greater fiscal discipline of the 17 countries the euro area.
Previously, according to this ideal scenario, the European Central Bank (ECB) will be on Thursday once again lowered its interest rates to avoid a relapse into recession and to give some air to banks experiencing difficulties in refinance.
But this happy outcome to the crisis is far from certain as Berlin and Paris still differ on the proper role of the ECB and how to control the budgets of the countries in the euro area.
“Next week everyone will be focused on the summit on Friday. But do not forget that we are already at the highest level since the fifteenth (early) the crisis in the euro area. Each time, stakeholders enthusiastic market before maturity and after … it’s the disappointment, “said Ken Polcari, managing director at ICAP Equities.
Wall Street has evolved sawtooth since the beginning of the fall at the discretion of the evolution of the crisis in Europe.
While the S & P 500 benchmark index fund managers, rebounded by 7.4% last week, volatility remains high due to the sensitivity of investors to any bad news from Europe.
But the predominant feeling is that European leaders have taken the measure of the crisis.