CRB

While patriotically buying US equities, or Intrade contracts, is 'believed' to reflexively improve the odds of the incumbent reaching a second term, the correlation between Obama's lead over Romney and stocks is actually not that high. The most highly correlated 'vehicle' for 'impacting' the odds of an Obama victory is, according to empirical data, the CRB Index.

European Risk remains buoyant (unlike in the US), but the question is whether Moody’s upholding Spain a tick above Junk is really worth a 30bp plus relief rally?

Hmmm… Bunds getting trashed by equities and Spailout; Spain getting a lift on the latter, but a break from Greek Troika news and German back pedalling.

Spain better, but had lost 20 bp just yesterday.

Equities stopping out and squeezing. Credit ripping tighter.

Risk On, but not everywhere. Wild...

European equities trying to decouple from EGBs and US equities, trying to trade “No news is good news”.

Low action day.

Short term trading strategy buy Spain on weekend bail-out hopes and resell rapidly might need to be deepened. Not much to chew on eventually.

Particularly light on hard data, take away from this week’s action was reduced volatility in the EGB world (unlike rather more jumpy and eventually depressed equities).

After rainy weeks, better weeks, we pretty much had a rather sleepy week.

Stronger Periphery trapping European equities, with the latter dragged down by US apathy.

Risk adverseness factors (equities – Periphery - EUR) decoupling.

US equities seem utterly tired.

Somehow the last months’ rally ahead of QE has tired everyone and since delivery every step seems sooooo heavy.

Stronger Periphery close will be the usual opportunity for politicians to rant about the lack of clout of rating agencies.

Good Jump in Risk appetite. Question is how far. Lack of absence of negative news, or better, markets simply ignoring the latter, doesn’t make for a convincing bullish rebound.

I’d say: We won’t get fooled again! European Bull trap.

Eerily quiet after yesterday’s post-ECOFIN cacophony…

No real take-away today: sometimes you need a breather and everyone agrees.

Key take-aways from today were: The IMF is gloomy, so is Draghi. Banking Union is months away. ESM and OMT ready to go, but no one wants that first dance. Spain is analyzing.

Oh, and an iPhone is just that. A phone.

Nothing new, nowhere.

Didn't get fooled again yesterday, but still facing denial today...

Some correction of Friday’s Bull trap: European Risk Off, EGB credit torsion and weaker equities.

Doubtful whether any fireworks will come out of the ECOFIN meeting.

Seems to be more about maintaining the relative market quietness and status-quo.

What can be said? Rinse, repeat, rinse, repeat.

Everyone basking into the market truce provided by Super Mario. And taking some easy time off… 

Friday afternoon Periphery squeeze barn stomp

On ECB Q&A: Yawn! Can’t always be a rainmaker and light fireworks every month. 

Quiero un iPhone para salvar el Mundo! Looks like Spain actually enjoys the sovereign-regions-banks negative loop with no wish to cut the Gordian knot.

No European data tomorrow: Mario D, the floor is all yours, after Mariano D’s bond sales.

Wow! Good equity swings in Europe: Down about 1% to the morning lows, up nearly 2% to noon highs and tanking back over 1.25% into the close.

 Core & Soft EGBs rather muted in volatility, closing by and large unchanged, with Periphery bonds running a separate path.

Again that decorrelation.

Jump, Jive & Wail…