European stocks ended last week on a high note amid expectations Spain will soon ask for a bailout. The Financial Times reported Spanish Economy Minister Luis de Guindos is in talks with the European Commission and will ask for bailout funds on Thursday.
"If it goes according to plan, the announcement would be a plus for global stock markets, the euro, and peripheral sovereign bond prices," write IHS Global Insight economists Nigel Gault and Paul Edelstein.
Some of the enthusiasm waned Monday after German Chancellor Angela Merkel rejected her French counterpart's plan to introduce a banking union for the euro area sooner rather than later. Any banking union "has to be thorough, the quality has to be good and then we'll see how long it takes," Merkel said this weekend, Bloomberg reports.
There's also ongoing tension between Germany and Spain over the aforementioned bailout request (or lack thereof) and a big drop in German business confidenceRead More »from “A Lot of Upside” for the Euro, Merk Says: Why the ECB Beats the Fed