The initial reaction is favourable for euro assets
Italian 10-year yields are now down to 1.48%, fresh lows in seven weeks, and that sees the yields spread between Italy and Germany 10-year bonds narrow to just 191 bps - the tightest since early April.
The response to the 'compromise' proposal by the European Commission has been more favourable so far for euro assets. Stocks are rising further with the euro also erasing its earlier losses against the dollar, now sitting at 1.0982.
But again, just be mindful that this isn't a straightforward solution to bridge the divide between France, Germany and the "frugals" i.e. Austria, Netherlands, Denmark and Sweden.
For now, the reaction has helped to boost risk trades further as well with US futures also comfortably posting gains of over 1%. Let's see if the euphoria can last.
