Europe Is Making A Sudden Comeback On Reports Of A More Powerful EFSF

snow blow

Photo: Shandi-lee via Flickr

UPDATE: Markets and the euro have popped on Reuters reports on the contents of an EFSF document.European markets are still down slightly, U.S. futures slightly positive.

Reports via FT’s Christoper Adams:

Rtr: after buying bonds on secondary mkt, EFSF can sell them back on mkt, hold to maturity, sell back to issuing sovereign or use for repo

European Commission, ECB would prepare agreement with ez country in 1-2 days specifying how long secondary mkt purchases would take- RTR

EFSF to be able to buy bonds on secondary mkt if ez country makes a request – RTR citing guideline document

EFSF to be able to buy bonds on secondary mkt if ez coutnry has no bank solvency problems, has good borrowing costs record – RTR

Amount vailable for secondary mkt intervention by EFSF would be equal to remaining lending capacity of bailout fund – RTR citing document

Previously: The optimism seen earlier this week, that perhaps Europe was going to rescue itself with some kind of mega-deal over the coming weekend, seems to be fading.

The most robust solutions for the new, expanded, EFSF, seem to be getting shot down by politicians and lawyers.

So markets are selling off notably.

  • France -1.5%
  • Dax -1.5%
  • Italy -1.7%

Europe also had a rough night. Hong Kong lost another 2%.

Futures in the US are basically flat at the moment.

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