It seems the EU summit was not all gloom and doom. In what looks like to be the final summit details, Sarkozy says all of the Franco-German proposals have been adopted. Whilst the EZ (17 countries) have had to go their own way (instead of whole EU – 27 nations) it appears that some progress has been made but whether it is enough for the market remains to be seen. AUD/USD has bounced back to 1.0048 whilst EUR/USD made it back to 1.3346. We now need to wait and see how Europe digests the comments and what happens to EZ debt yields in particular Italy’s and Spain’s.