Spanish Stocks And Bonds Bleeding Into The Close

Tyler Durden's picture

Europe is closing on a decidedly negative tone led by weakness in Spain specifically. EURUSD in 80 pips off its earlier highs (under 1.2950) as Spain's 10Y spreads rises once again (now up 33bps in thelast few days) and its stock index (IBEX) is down 4.25% since last Thursday (as is Italy's FTSEMIB). The front-end of the Spanish yield curve is also leaking higher in yield rather quickly as fast money exits. Credit markets tracked stocks but were less volatile on the day. Europe's VIX dropped modestly which combined with credit and equity weakness suggests perhaps hedges being lifted and real-money unwinds. The Draghi-rally trend is now over - as S&P futures test the Dream lows (with European stocks still outperforming US post-Draghi).

European stocks are sliding fast...


European sovereigns - specifically Spain are losing their bid...

and today the EUR started to get the joke..


European stocks are still outperforming post-Draghi relative to US...


Charts: Bloomberg

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Orly's picture

And still the Euro will not budge.  There must be some central banks somewhere prepared to lose their arses on propping this puppy up.  But when the end-game comes and they know the gig is up, that move is going to be stunning, to say the least.


TPTB_r_TBTF's picture

the Euro wonT budge against what?

Prop it up against what?

... against the Dollar, lol?

When two ships are sinking, what makes you think one should sink faster than the other?

when two currencies fail together, it's called parity.

slaughterer's picture

Serious anxiety emerging throughout the US markets since 10:30am.  

machineh's picture

Time to wheel out Draghi for a new claim:

'Believe me, it will be MORE than enough!'

q99x2's picture

Time for the disclosure of alien bodies.

firstdivision's picture

...sooo things didn't go well for Draghi when he crossed the Rhine?

Yen Cross's picture

 Take a look at the U.S. 10year. once again the markets are down and bonds are up 2.86%  

U.S. 10-Year 1.845 1.794 1.856 1.789 0.051 2.86%
Orly's picture

Hey, YC

How can it be?  This thing stopped making sense a long time ago but now, it seems like a random market generator has taken over everything.  Just unbelievable.  Ten-year yield up, USDJPY down, Euro goes literally nowhere, AUDJPY in the stratosphere.

Someone has to be spending a lot of money propping these things up.  I can't imagine that this ends well.

How do you see it unfolding from here?  I mean, would someone please tell me what is going on?


Yen Cross's picture

Hi Orly,

Been hearing SNB has been selling lots of euros for aud, and bundsbank was also said to be buying aud.(watch German 2year bonds)

Japan is doing that foreign investment (yen devaluation scheme), and they have been investing in Australian banking and R/E sectors. I am just trading smalls right now. Exporters keeping a lid on usd/jpy, big offers up at 80.60. Last week was very similar to this week. I think aud is going to sell into tomorrow.


AvoidingTaxation's picture

Why EUR/CHF is now at 1.215? They are trying something late I think. They are trying to sell their EUR in this strenght and diversify in different currencies (they can not i think diversify in XAU for political reasons), like AUD/GBP/NOK/SEK/WON/YEN/DKK/CAD/SGD. Perhaps they will add BRL/PLZ/CKF too.