In the US the markets are not appeased by the unsurprising decision of the an Administration that it will after all be able to pay the interest. They knew the President was just playing dangerous politics. The markets are now looking at the plan to curb the deficit, and are not overly impressed. As US growth falters, so the deficit looms larger. The US remains on the watch list for a downgrade.
In Italy and Spain markets are once again becoming sceptical. Can Italy easily roll over its large stock of debt as it comes due? Can Spain bring its revenue and spending closer together to cut the amount of extra debt it needs?
These two are back in the glaring spotlight of bond market criticism. The EU bail out pot is big enough for Greece and Cyprus, but it would be very stretched by even a partial rescue for these two large countries. The Euro debt crisis rumbles on. The Euro needs a sovereign to run its economy, pay the bills and put proper discipline into the public accounts.