Draghi's Dream Dashed As Spain Yields Hit Six-Week Highs

Tyler Durden's picture

Spanish bond spreads reach back above 450bps today for the first time in six weeks. The last 3 weeks have seen peripheral bonds bleeding slowly but surely as hopes of OMT fade and Draghi's dream is dashed (as the auction this morning showed just how gamed out the conditional OMT has become - no money without a crash). This 3-week shift is the largest since Super-Mario first hinted at his omnipotence and shifts spread back above their 200DMA. GGBs also fell out of bed rather nastily as their much-needed money weas delayed and the no-brainer trade has lost over 7.5% in the last 2 days. So ELA is not monetary financing; OMT is a fully effective backstop; and unicorns are real...

European govvied bond spreads are all losing steam...


Spanish Bond spreads leaking badly...


GGBs plunging...


EURUSD is sliding lower... but remains rich still to implied swap spreads...


and European stocks are rolling lower...


Charts: Bloomberg

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slaughterer's picture

DAX 6750 // EUR/USD 1.25 inevitable. Just a matter of how we get there.  

tuttisaluti's picture

They should call this OMG instead of OMT.


SheepDog-One's picture

Draghi just sharted his new Versace.

asteroids's picture

 The bond market is calling his bluff. He says he'll do whatever it takes. OK, well the bond market is calling you out punk. Time to man up and take your best shot. Do not be too surprised if this clown is replaced in order to kick the can down the road a bit more.

muppet_master's picture



YESTERDAY a 7.4 hit Guatemala (Mayan territory)...WHEN is a 10.0 gonna hit DC as a pat in the back "election victory" LOL !!

WHEN is QEorganizer gonna sick holder on me?? it's ME causing Sandy and the quakes..!!! ROFLMAO !!!! i know those stupid fools are reading the ZH blogs....LOL !!!


PersonalResponsibility's picture

Just pray a 10.0 doesn't hit Fukushima and knock over the unstable spent-fuel pool 4, because the northern hemisphere would have to evacuate.

Gene Parmesan's picture

Who could have seen this coming.

youngman's picture

An England just shut off their spigot....wonder why that change?  Wierd....I bet the turn it back on very fast...so running to the "SAFE" haven is where now??????   Apple Google Netflix....lol

Vegetius's picture

Maybe someone was looking at the rioting in Greece last night. Serious step up in the type petrol bombs being used. Good to see that people are using their education in a positive and constructive way. Looked like blast type bombs were also used, next stop pipe bombs and then the all-time favourite of the Proletariat, Car bombs. 

As for Draghi he should avoid lampposts from now on look what happen to the last Italian leader to strut on the European stage, hung by his heels with his mistress.


disabledvet's picture

Draghi? That's Goldman Sachs..."the ones who stole all of Italy's gold." Some of that gold was over 800 years old btw. now it all sits at the ECB so various "trading stategies can be deployed to tear the EZ apart." And God is most displeased and sends a Hurricane "right up their phucking ass"...because he is God...and God is cool. (He sure ain't Nietze mofo's.)

Madcow's picture

we're just beginning a 30 year Detroitification of the "West" - 

anyone living in a big city should come to terms with their death wish. 


Grand Supercycle's picture

WILE E.COYOTE sell off awaits...

SPX H+S on daily chart continues [very bearish pattern]

SPX also shows probable H+S on weekly chart.

This bearish impending price action will comprise the first installment of the very overdue Wile E. Coyote sell off.

As mentioned, the previous SPX meltup - devoid of healthy retracements - has caused this coming crash.

One can only stretch the bungee cord so far before it reacts...


walküre's picture

Once the ECB is monetizing with both hands, it doesn't really matter anymore. Germany is now in a corner and cannot withstand the pressure to accept a PRINT FEST.

Printing is the only game in town, is the only game they now. The alternative is lights out and a return of the middle ages.

forwardho's picture

Honestly, does any of this suprise anyone? All the ugly got swept under the rug until "after the election. This only served to further distort the already completly disfunctional market. Past performance is of no value in a fantasy financial world.

fonzannoon's picture

gold is flirting today. it's making me blush. Stop it gold (wink)

slaughterer's picture

I would not expect much more downside than ES 1360 this year.  Whereas the European markets are more vulnerable.  

walküre's picture

There's no other place to put the money. There won't be a rush to buy higher yield EU sovereigns. Some metals will get a speculative lift in anticipation of a massive debt repudiation (a.k.a. default, a.k.a. jubilee, a.k.a. reset). The fear trade is in gold and silver. Oil demand is decreasing with reduced trade and manufacturing. US debt is safe but boring until rates go up. Before that happens, the deleveraging has to happen.

Yen Cross's picture

 Especially the DAX. That index, is real rich right now.

Tenshin Headache's picture

It's getting serious. Time for someone to lie.

Yen Cross's picture

Look for Draghi to summon his parrot Nowotny any time now... Sorry Mario you cried wolf, one too many times!

silverserfer's picture

Draghi's dreams ALWAYS start off with jumping on a few turtles and angry mushrooms.

leadingmarkets's picture

Looks like some serious divergence in the bottom chart. I like simple stock charts check out stocks from these guys http://pennydreamers.com