Perhaps between the new French president, the Greek elections, Merkel's encouraging silence in the face of Monti's proposals for an unscrupulous use of EFSF resources and pressure from the G20, something is changing in the mood of the market. Traders are now looking to the Fed meeting, and expect new quantitative easing measures.
In Chicago, the VIX volatility index fell, signaling lower risk aversion. This lessened aversion is also being felt in the currency markets, with the dollar weakening against both the euro and the yen and the Australian dollar (the latter a faithful indicator of risk-taking). Asia's regional stock market index was up 0,8% this morning, to its highest level since May 15. In Japan, imports and exports both grew more than expected, and the balance recorded another deficit.
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