By Greg Peel

The Dow closed up 32 points or 0.3% while the S&P gained 0.6% to 1319 and the Nasdaq added 0.6%.

US ratings agency Egan Jones ? one of the lesser known Marx Brothers ? last night downgraded Germany's sovereign debt to A+ from AA-. The downgrade was not a reflection of a debt problem for Germany, as has been the case across the rest of the eurozone, but rather the fact Germany has, is, and will need to further carry the can for all and sundry.

Markets didn't blink. Not because Egan Jones is not as influential as your S&Ps and Moody's, but because after three years markets have finally come to realise that they have already priced in risk in respective assets and any agency downgrades are only bringing ratings into line well after the fact. The popular press still likes to jump up and down about downgrades but the markets now only shrug, as well they should. No one in Europe will stop investing in German bonds just because Egan Jones says A+ rather than AA-. We all know Germany is the paymaster, and we all know that if Germany has to bow to pressure to pursue a more pro-growth eurozone policy then it can only mean the German taxpayer dipping even further into the pocket.

Spain, meanwhile, tried to borrow more money last night through the usual channels. The Spanish Treasury managed to sell E1.6bn of three-month bills at 2.36%, up from 0.85% in May, and E1.5bn of six-months at 3.24%, up from 1.74%. The Spanish ten-year bond yield is quietly moving north again, last night reaching 6.81% despite the government having put out its hand on behalf of its banks. It remains uncertain as to whether the bail-out funds will go directly to Spanish banks, in which case it's not really a "sovereign" bail-out, or to the Spanish government to then pass it on to the banks, in which case it is. It's all academic, and the general feeling is more will be needed soon on the sovereign front. Particularly if those bond yields keep rising.

We nevertheless have the EU summit ahead of us, beginning Thursday night. Markets are generally poised as they await what significant, definitive and ground-breaking decisions might be made at the summit, but good God ? that'd be a first. A draft road map has been offered to Germany ahead of the summit, seeking a gradual path to fiscal union and a banking union, with a common eurozone bond part of the mix. The bond, as always, was swiftly rejected by Berlin. A euro-bond would simply mean everyone else riding on Germany's back and Germany's borrowing cost reflecting zone-wide risk.

The rest of the draft was criticised by economists as reflecting too slow a path and criticised by Berlin as not featuring sufficient budget control measures. The reality is the whole thing will inevitably be a stalemate, just as all of the EU has been in a stalemate since early 2010. A tighter fiscal and monetary union means Germany supports every member economically, and Germany won't have a bar of it unless a central body can control sovereign budgets. No country is prepared to cede sovereignty.

The eurozone is, was, and always will be a failure and a blindingly na