Futures for Monday have turned green after Asia posted positive economic data on Monday and European leaders are signaling confidence about their plan to deal with European debt. Japan released positive export data with a surplus of 300 billion yen in September. China posted better than expected “flash” PMI manufacturing numbers in October which came in at 51.1. China’s previous PMI number in September was 49.9. China’s economy is looking healthier with no “hard landing” in sight. Asian markets are rising in Monday trading. Commodity prices such as copper are increasing.
Meanwhile, European leaders at the EU summit in Brussels are signaling that they are moving closer to a plan to contain their debt crisis; however the details have still not been revealed. Wednesday is an important day for Europe because clarification will occur about the details of the European Financial Stability Fund and their financial distribution plans. The other two issues that will be addressed on Wednesday includes specific details about how Greece’s debt restructuring will occur and banking re-capitalization requirements with Eurozone banks.
Speculation is growing that Greek bondholders may be asked to take a 50% haircut which is about 10% more than Europe’s banks have shown interest in handling.