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Peripherals Plunge As Swiss/German Safety Sought Once Again

Tyler Durden's picture




 

For the tenth day in a row, Portugal's bond spreads widened - now the biggest two-week move since January as its absolute spread is back well above 700bps once again. Spain and Italy have been leaking wider consistently in the last few weeks (+15-25bps from the tights on Friday) and Spanish and Italian equity markets are tumbling back off their post-Draghi euhporia highs (down 2% from Friday's highs alone). Critically, safe-havens are seeing heavy flow; Germany 2Y is back below zero for the first time in two months and Swiss 2Y is below -20bps again. EURUSD is reverting back down to its swap-spread-model implied fair-value as 'hope' fades of OMT's ability to do anything 'real'. Europe's VIX jumped its most in over two weeks to 22.2%.

 

European stocks are lagging...

 

European peripherals not having a fun two weeks...Spain/Italy 44bps wider! Portugal +123bps

 

and Greek bonds have given back 180bps of their yield compression in the last 10 days... a 15% price drop in 10 days!

 

German and Swiss 2Y rates are at 2-month lows...Germany negative once again!

 

Portugal is struggling hard...

 

as the EURUSD reverts down to its swap-spread-implied fair-value...

 

Charts: Bloomberg

 

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Mon, 11/05/2012 - 12:54 | 2948917 monopoly
monopoly's picture

"German and Swiss 2Y rates are at 2-month lows...Germany negative once again!"

This is so pathetic, buy the dollar....rriigghtt. What is that ticking sound I hear in the background?

Mon, 11/05/2012 - 13:00 | 2948931 Ghordius
Ghordius's picture

just buy the glorious dollar, will ya?

Mon, 11/05/2012 - 13:13 | 2948982 Orly
Orly's picture

That's going to happen, too.  USDJPY pair is near a reversal of character and Japanese repatriation of funds and fear of a US economic collapse are waning severely. vis-a-vis the rest of the world.  The US dollar will become a safe-haven again in spectacular fashion.  Euro prolly goes to 1.19 from here.

Now, when will that happen, exactly?  Who knows but the move is going to be so severe that it won't be necessary to time the bottom, just get on the train and ride it up.

:D

Mon, 11/05/2012 - 13:19 | 2949003 disabledvet
disabledvet's picture

Japan collapses with Europe. There's much to be said for that. "As with the euro-bloc so it is with the dollar bloc." there is a price to membership...and it is an Exorbitant Privelege indeed.

Mon, 11/05/2012 - 16:19 | 2949589 Ghordius
Ghordius's picture

nah, the numbers don't support that view by far - yet

Mon, 11/05/2012 - 12:59 | 2948937 pasco35
pasco35's picture

"The only time we change, is when we hit a bottom!"

-Dave Seeley

 

http://www.youtube.com/watch?v=GvP7lchjpws

Mon, 11/05/2012 - 13:12 | 2948981 Dr. No
Dr. No's picture

"only when we have lost everything are we free to do anything"

 

-Tyler Durden

Mon, 11/05/2012 - 13:43 | 2949071 Silver Bug
Silver Bug's picture

Stop bouncing around and just buy Gold and Silver! Get it over with.

 

http://schiffblog.blogspot.ca/

Mon, 11/05/2012 - 12:59 | 2948939 Nothing To See Here
Nothing To See Here's picture

Ron Paul 2016 !

Mon, 11/05/2012 - 13:01 | 2948946 hourglass86
hourglass86's picture

Nice boost on German exports!

Mon, 11/05/2012 - 13:08 | 2948967 Timmay
Timmay's picture

Timothy Geitner = Atlas.

Mon, 11/05/2012 - 13:35 | 2948972 Zero Govt
Zero Govt's picture

"For the tenth day in a row, Portugal's bond spreads widened..."

well never-super Mario at the ECB (Euro Communist Bank) has recently signed off on 'allowing' a market to price different Euro Govt Bonds at different rates ..phew!!

you wouldn't want a market pricing things realistically unless they have political and regulatory approval at EC/ECB level (the political brain is superior to the free markets brain you understand, these boys behind Govt desks really know how to price).

Markets must behave according to Marxist, sorry, Mario's vision of the future.

(This message has been approved by the Euro Commie Commission and 17 other alphabet soup regulatory agencies.)

Mon, 11/05/2012 - 13:17 | 2949000 Schmuck Raker
Schmuck Raker's picture

Curious that someone rated this article one star. What gives?

Mon, 11/05/2012 - 13:18 | 2949001 Orly
Orly's picture

There must be absolutely zero volume in this market today.  Anyone see the NASDAQ just flat-line at lunch time?  Anyone ever seen that before?

Mon, 11/05/2012 - 13:23 | 2949013 Winston Churchill
Winston Churchill's picture

Flight fom one fiat money country to  another.

Looks like 'the only way to learn is the hard way'.

PM's are the only safety now.

Even the dumb money has to catch on.later rather than sooner.

Mon, 11/05/2012 - 13:26 | 2949021 Zero Govt
Zero Govt's picture

I've flown (got Swiss Francs)

I would have taken some Deutschmarks but there weren't any available ...maybe soon!

Mon, 11/05/2012 - 13:26 | 2949023 THE DORK OF CORK
THE DORK OF CORK's picture

The Euro is beyond sick.

It feeds the PIGs dreams of mass concrete , cars and all that other good modern stuff and then leaves the building for the next sucker.

Turkey is not in the Euro but is gaining debt at the moment........as Euro capital seeks a return

 

Its the darling of the euro wage arbitrage club of Rome............for the moment.

 

Eventually when they build their fancy high speed line the Turks won't have the credit to use these Turkeys.

http://en.wikipedia.org/wiki/High-speed_rail_in_Turkey

Mon, 11/05/2012 - 13:38 | 2949054 THE DORK OF CORK
THE DORK OF CORK's picture

 

Commercial vehicle sales in Italy are down big time of course.
(Jan – Sep)
From 150,620 in 2011 to 98,456 in 2012. (-34.6%)

Van sales -3.5 ton (Jan – Sep)
Y2007 : 178,878
Y2012 : 85,910

Portugal looks to be turning Greek also with a -53.6 % decline to 12,337 commercial vehicles from 26,580 in the same period last year.

Van sales -3.5 ton (Jan – Sep)
Y2007 : 51,954
Y2012 : 10,819

That is a BIG drop of workmens jobs of all types......seen through the eyes of vehicle sales which never lie unlike much of the other "data" sets

To compare Greek van sales figures
Y2007 :17,780
Y2012 : 2,595

The Greeks as always are a bit more extreme but not for long it seems.

It explains why Ford transit is moving to Turkey.
http://www.bbc.co.uk/news/uk-england-hampshire-20078143

But I have been to Turkey not so long ago now (6~ years), back then eastern turkey especially was borderline 3rd world.
It does not have the basic energy systems to cope with a Industrialisation.
The place is about to blow up in my opinion as hot international capital leaves the place for dead just as it did Greece , perhaps it will even come back to Greece to some extent which will be quite funny.
Why sink more precious capital into a undeveloped system ?
All to save wages…………..
Not very bright it seems.


 

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