Compared to yesterday's doom and gloom session in the US, today is shaping up to be much more of a optimistic day. US markets were able to finish flat yesterday and the Asian indexes are all trading in the green. While nothing has fundamentally changed between yesterday and today, specifically in the Eurozone, there is a feeling that the systemic threat of an EU meltdown may have been exaggerated. We suspect that the recent losses in risky assets are most likely due to adjusted growth expectations and not so much to contagion fears. Over the past few days, several EU nations have announced further austerity measures and this trend looks to continue. Strict fiscal discipline will cut into EU growth and hamper global growth potential in the future, but any growth created should be sustainable. Yesterday, the ECB further continued to beat the sterilization drum, but failed to convey any further understanding of how it'll work to the markets. German presses shouted that the ECB is not implementing full QE and that Germany will not help sick EU states skirt their need for fiscal tightening. On the other hand though, it does appear that the ECB bond-purchasing program may be beginning to work, as yields are beginning to fall across various markets. Another Euro positive is that German Chancellor Merkel finally seemed to grasp the depth of the EU crisis by admitting the $1 trillion bailout was only a temporary fix and that long-term structural reforms were needed. Former ECB President Prodi stated this morning that the Euro needed a supranational framework, which we agree with 100%. In the US, yesterday's TIC data showed a surge of capital inflow into the US, to the tune of $140bn, illustrating the untainted demand for US treasuries during periods of global financial stress. A Euro negative in the short-term, as these positions will not quickly be unwound, but the long-term stabilization of the global marketplace demands that these inflows reverse at some point in the future. Only time will tell whether the capital immigrates back to the EUR or into another asset altogether.