Bailout Too Little, Too Late, Contagion Fear Rages On - After 3 weeks of dragging their feet, European Union finance ministers endorsed an 85 billion euro rescue package for Ireland and approved outlines of a permanent crisis-resolution system which could make private bondholders share the burden of restructuring sovereign debt after 2013. So where is the bounce in the Euro? There isn't one because they did not act fast enough to stop the fear of contagion and now Portugal and Spain is squarely in the market's sight. Today's Italian bond auction drew lukewarm demand and highlighting investors' unease towards euro zone debt. Also, the cost of insuring Portuguese and Spanish debt against default rose to a record high today. It is hard to imagine the ECB holding to its pledge of removing some of the emergency measures put in place earlier this year in this environment. Turning to the charts, the Euro continues to flash a bearish signal by falling through its 200-day moving average this morning. In Asia, the Nikkei stock index rose to its highest level since June as the Yen continued to weakened against the USD on stronger U.S. economic data last week and continued tensions on the Korean peninsula. In Canada, the CAD has risen to a two-month high against the Euro but remains in a tight range against the USD. Data this week should held the Bank of Canada determine the path of monetary policy for early 2011. This week's date includes GDP for September and employment data for November.
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