The two reasons for today EURO stock market rebound are simple.

1. Greece established a new united government.
2. Italy has passed a austerity plan.

For 1., I cant see any relationship with the Greece debt issue. It doesn’t make sense that the change of governor will effect the probability of Greece debt. And it doesn’t help the spreading out the credit crunch crises.

For 2., It is definitely a good news but it is far away from enough by increasing the retirement age from 65 to 68 in 2025. It is nothing comparing with the 1.9T debt in the country.

If you paid attention to the Bloomberg News. You should know there was a false alarm from S&P yesterday. The S&P downgraded the France from AAA to AA by a mistake. And here is the details:

1. The S&P changed the France rating at their official website from AAA to AA for two hours.

2. The S&P sent out notification email to her subscribed/paid clients to tell the rating change.

3. After two hours, S&P announced that was a mistake.

I chatted with my colleagues and they told us that there will be a ton of documentations prepared and a very long list of approval procedures for the announcement. Thus, the following should be the possible conclusions:

1. Tones of the France downgrade documentations are prepared.
2. The announcement of the downgrading of France sovereign ranking is in progress. As least some of the approval milestones are completed.
3. Since the ranking was not only updated from the website but also sent out from email, it was not a single team mistake. It increased the possibility that S&P was forced to swallow back the change.