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EURUSD Roller-Coaster Continues As Greek Bonds Slide
European stocks popped at the open and then generally trod water for the rest of the day. The initial liquid-driven surge had no follow through and in fact European sovereigns bled wider most of the day - with Greek govvies now down almost 10% (in price) in the last week. Credit markets re-racked along with stocks - with XOver outperforming and Main (investment grade) underperforming (along with financials). The story of the day was yet another 100pip-or-so rampapalooza in EURUSD - the 3rd in 5 days - as we noted earlier, when everything else is shut, EUR is simplest lever to drive markets higher given the correlations (and no Treasury police to keep things under control). Despite today's push, Spain's IBEX remains -0.5% on the week (as its peers are all up around 0.5%) and Italy and Spain bond spreads are up around 15bps on the week. So with EUR up around 0.22% vs USD on the week and fulcrum securities from Spain down, take your pick on where risk is being flushed.
EURUSD rampapaloozas....
GGBs - one-way street 'no-brainer'
Spain 2Y yields bleeding... +40bps in 2 weeks!
Charts: Bloomberg
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Selling ahead of the US open tomorrow
I guess its all good, just as long as we can leave markets closed and do daily monetary easing.
The markets have pretty much been closed since 08, or, aguably 87.. The terminator casino will open tomorrow, however.
The whole rediculious game started last night right when BoJ did QE-9. The dollar sold off when the yen blew up. All the crosses got hammered initially, and then the unicorns hit the buy button on risk into Europe. That extra hour from Daylights Savings (Asia close into Europe open) didn't help any either. That BAC (bullshit) China GDP remark helped to.
As much as I hate the U.S. markets, they need to get them re-opened ASAP!
Also front-running a way "better than expected" weekly jobless number + Chicago PMI + ADP + ISM + consumer confidence++++ did I miss anything?
Good Job! I think you got it pretty much covered.
Except the Australian building approvals coming in tonight at 8:30 Eastern. That could really set the ball rolling, so watch that number closely. It could print at recessionary levels, triggering a sell-off in the AUD, which would trigger a sell-off in EUR, which could slap down the European equity markets.
With the sell-off in the AUDUSD, I only wonder which way the USDJPY would break under that scenario. There is a bearish Gartley formation on the USDJPY 4H chart, which would indicate a pent-up move to the downside for the pair to ~78.75.
Either way, it's going to be a long night.
:D
I hope Gartley isn't fibbing to Fibo about his Nacchi.
A weaker EUR would imply a fair price on Greek debt.
I am sure that Ben "Debt Seller/Celler Dweller" Bernanke will let that happen!
Is there anyone out there that is holding Greek bonds? Can one of you tell me what you are thinking? Let me correct that.....what is it that you are hoping?
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