The favorable German court ruling today will likely add to the overall air of optimism in the stock market and help it build on recent gains. The even bigger event coming up is the expected Fed announcement of a third round of quantitative easing Thursday.

We also have a much anticipated Apple ( ( AAPL - Analyst Report ) event today, where the company is expected to announce iPhone 5. All in all, the wind seems to be at the market’s back right now.

Today’s ruling from Germany’s highest court came in as expected. But many were looking for whether the court would attach any onerous conditions to the country’s ratification of the €500 billion permanent rescue fund, the European Stability Mechanism and the so-called Fiscal Pact. The ESM and Fiscal Pact have generated plenty of controversy among European conservatives as they run counter to the principal of national sovereignty over budgetary matters.

The court appears to asked for no more restrictive conditions than allowing the German parliament to have a say over increasing the size of the ESM, which is the situation at present anyway. The ruling should help improve the Euro-zone environment a bit more, which had been moving in the right direction ever since last week’s ECB announcement. Yields on 10-year Spanish government bonds are already down more than two percentage points from their late-July highs even though the Draghi plan has still to take effect.