The dispatch from bizarr-o world this morning indicates things are looking up again.

Greece has named a new prime minister (we think for real this time) and he shall be called Lucas Papademos, former vice president of the ECB.

Italy managed to sell 5 bln euro of 12-month bills with demand for the securities two times the allotted amount.  The auction yield was a record 6.087% versus the previous auction yield of 3.57%.  The bizarr-o thing, though, is that today's yield has provided reason to cheer, first because demand was solid, and secondly because there was a 7-handle on the 12-month bill yesterday in the secondary market.

The ability of Italy to tap the capital market for financing triggered a relief bid across its yield curve that has been highlighted by the 10-year Note yield falling back below 7.00% (now 6.80%).

It has been reported that the ECB was a buyer in Italy's bond market today, so the focus should soon shift to whether this relief bid can persist without ECB support.

For the time being, the equity market appears to be taking things one minute -- er one step -- at a time.  The S&P futures are up 16 points and are trading 1.3% above fair value.

It should be noted that the bulk of those gains were achieved prior to the release of the initial claims and trade balance reports in the U.S., both of which were better than expected.

We will venture to say that Cisco (CSCO) had a hand in the positive disposition, as the networking giant reported fiscal first quarter earnings that exceeded the Capital IQ consensus estimate and provided fiscal second quarter earnings and sales guidance that was better than expected.

Still, it remained clear that happenings in the bizarro-zone (our euphemism for the eurozone) served as the primary trading catalyst.

Looking at the data, the September trade balance showed a surprising narrowing in the deficit from an upwardly revised -$44.9 bln (from -$45.6 bln) to -$43.1 bln (Briefing.com consensus -$45.9 bln).

The contraction in the deficit was spurred by exports increasing $2.5 bln from August to $180.4 bln and imports increasing $0.7 bln to $223.5 bln.

A good chunk of the contraction stemmed from a $1.2 bln net export surplus in nonmonetary gold.  That is excluded in the BEA's net export calculations, so the positive impact on the second estimate for Q3 GDP will not be as pronounced as some might think based off the headline number.   Nonetheless, the revision to August coupled with the September number should compute favorably in the revised Q3 GDP estimate.

Separately, initial claims for the week ending November 5 declined by 10,000 to 390,000 (Briefing.com consensus 400,000) while continuing claims for the week ending October 29 fell by 92,000 to 3.615 mln (Briefing.com consensus 3.690 mln).

The claims levels are certainly on the right side of 400,000, yet the enduring message remains:  initial claims around this mark are supportive of nonfarm payroll growth in excess of 100,000, but not so far in excess of that mark that there should be a meaningful change in the unemployment rate.

In other developments, the Bank of England held its key lending rate unchanged at 0.50% and maintained its asset purchase program at 275 GBP.  What matters more to the capital markets right now though as far as central banks are concerned is what the ECB does.

Stay tuned, because you never know what you are going to get in bizarr-o world.

--Patrick J. O'Hare, Briefing.com

Patrick J. O'Hare is Chief Market Analyst for Briefing Research, Briefing.com's institutional research service.  To request a free trial, please email researchsales@briefing.com.