The “troika” – Italian, Spanish, and French bond yields –  is acting pretty well even after the S&P downgrade.  Italy is under 6 percent and that is what matters.   We sense there will be tremendous pressure on the shorts and equity risk off crowd going into the EU Summit and  believe the market moves higher even if it’s just a fig leaf to give the ECB cover.  After that?  All bets off going into 2012.    Stay tuned.

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