A story that has flown mainly under the radar as market attention has focused primarily on the European sovereign debt situation is the progress, or lack thereof, of the “Super Committee.” With the deadline for their deliberations closing in we examine the plans on hand and the consequences to the US credit rating of failure.

The themes to look out for this week include: 1) developments in Greek and Italian political realms, 2) the fact that global leaders at the G-20 shunned European overtures for more funds, 3) the release of trade data from key countries, 4) the after-effects of the Oct NFP report and how it may impact 5) speeches from the FOMC’s hawks and doves this week.

The last 2 weeks have seen a historically strong rally in the S&P500 and subsequently sharp gains in the EUR/USD. The questions is what’s next for this rally. The clock is ticking on the Europeans to create a “grand solution” to its crisis which should include 3 parts – managed default of Greece (larger write-downs), a bank recapitalization plan, and support measures to ringfence any contagion. In the US, we have a slew of macro data to help drive the narrative on the US economy following better than expected jobs and retail sales report which helped our current risk rally.