By Greg Peel

The Dow rose 92 points or 0.7% while the S&P gained 0.9% to 1331 and the Nasdaq added 0.7%.

German chancellor Angela Merkel has stubbornly declared there will never be a euro-bond while she is alive. We could laud her as a hero for being prepared to make the ultimate sacrifice, or we could see her as being a stumbling block as far as the rest of the eurozone's leaders are concerned. We might not be surprised if there were one or two out-of-work Greeks hoping her statement is an open invitation, but the reality is that a euro-bond, implying zone-wide borrowing, would simply mean Germany directly taking on the debt of the profligate southern states rather than having the choice of whether or not to help them out.

I'll say it again, and I'm not the only one: perhaps the best result for the world would be for Germany to exit the eurozone.

It won't of course, given the Deutschmark would fly to the moon, so Merkel's push is to move toward fiscal union before more a comprehensive monetary union can be justified. But fiscal union implies the sacrifice of sovereignty for all members, and particularly the more powerless members. This, too, is anathema, and that's where we are before we kick off in Brussels tonight.

Given low expectations for anything other than "more of the same" being the ultimate outcome of the summit, it might seem surprising that European and US stock markets all rallied last night. The major EU indices were all up 1.5%. But while there may be some traders setting their positions long on the assumption nothing really bad will come out of Brussels, it is more likely short positions were closed out on a "just in case" basis while we pass through this latest period of uncertain tension.

There were, however, a couple of strong economic data results out in the US last night to give Wall Street a nudge.

Pending home sales jumped 5.9% in May to reach an equivalent index level of May 2011 ? the month before Obama's homebuyer rebates were due to expire. Recent US housing data have been a little bumpy, but it does appear the underlying trend is one of slowing turning around to confirm a very low bottom (and thus a very long way back). Housing, along with unemployment, are the two major factors of the US economy that are seen as crucial to a recovery ? a view shared by the Fed.

New durable goods orders rose 1.1% in May when economists had expected no change. The largest segment of the gain came from the lumpy and volatile transport order subset (which includes airliners) but ex-transport the 0.4% rise still beat estimates.

There is also heightened expectation that tonight the US Supreme Court will declare Obamacare unconstitutional, which has the Wall Street crowd very excited. If not, then Wall Street is at least beginning to feel Mit Romney might just be in with a chance. Healthcare reform had been a major plank of the platform upon which Obama was elected so he had an obligation to push legislation through. Whatever your stripes, it was simply a case of not being the right time for such socialist reform when recovery from the GFC was paramount.

The economic data had Wall Street feeling a little more confident last night. Speaking of confidence, Tuesday night's very poor Conference Board consumer confidence reading marked a level that has only been seen a handful of times in the index's history, which each time has indicated a contrarian buy signal leading to a subsequent 10% stock market rally. Pause for thought perhaps, but then those other times probably didn't involve EU summit number 14.

Markets elsewhere were pretty quiet last night ahead of the summit. The US dollar index rose 0.2% to 82.57, yet the Aussie is slightly stronger at US$1.0080 and gold is up a mere tad at US$1574.20/oz. US bond yields were little moved.

Base metals were mixed with a 1.5% rally in aluminium being the only move of note, while Brent rose US43c to US$93.50/bbl and West Texas added US$1.19 to US$80.55/bbl.

The SPI Overnight was up 28 points or 0.7%.

It looks like a good start for today, but again I warn a lot can happen on the micro level as we approach year-end tomorrow. Tonight the summit begins, but note it is scheduled for two days, and we'll also have the last revision of US March quarter GDP out tonight (1.9% expected) and a decision on Obamacare is pending.

Rudi will appear on Sky Business today at noon and on Switzer TV between 7-8pm later tonight.

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