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Italy's Worst 5-Days In 6 Months

Tyler Durden's picture




 

It's all good. That's what Monti says about the political 'vacuum' being left behind. Sure enough those cagey bond chaps did not like the news and with Italian and Spanish bond spreads now wider by 40-50bps in the last 4 days, and Italy seeing its worse 5-day run in over 6 months, one could be forgiven for believing some semblance of sanity was returning to pricing in Europe. But no. Stocks, on average, ended the day nicely green - buoyed by a surge in the US into the European close. Spain and Italy's stock markets did drop but regained a lot of the loss by the close. Credit markets (IG, HY, and financials) remain notable underperformers - just unable to muster the enthusiasm of equity holders into year-end. Europe's VIX rose to 17.4% - breaking back north of the US VIX (after recoupling last week). EURUSD is going out unchanged from Friday's close - having traded 50 pips lower early last night.

 

Italian spreads are at one-month wides, broken above their 50DMA, and have seen the biggest 5-day widening since early April 2012... but apart from that - all is well.

 

and while credit markets remain far less excited, stocks push higher...

 

Charts: Bloomberg

 

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Mon, 12/10/2012 - 12:53 | 3048825 mrktwtch2
mrktwtch2's picture

leave the euro..take the cannolies..lol

Mon, 12/10/2012 - 13:11 | 3048879 Dead Canary
Dead Canary's picture

DON'T GET IN THE CAR CARLO!

Mon, 12/10/2012 - 13:00 | 3048852 Iam Yue2
Iam Yue2's picture

Where is Bill "I bought Italian Bonds" Gross?

Mon, 12/10/2012 - 13:10 | 3048876 ApollyonDestroy
ApollyonDestroy's picture

Italy schmitaly just hurry up and bomb Iran already!

Mon, 12/10/2012 - 13:11 | 3048890 asteroids
asteroids's picture

Debt is a monstor that never sleeps. You either pay him off or he comes back bigger and hungrier than ever. Greece is learning that. Italy is up next. The Italian  debt monstor, should it really get going, will truly be a terror.

Mon, 12/10/2012 - 14:09 | 3049076 Joebloinvestor
Joebloinvestor's picture

Party on Italy!

 

Mon, 12/10/2012 - 14:12 | 3049092 q99x2
q99x2's picture

The decline in volume of markets these days makes it easier and easier as time goes on for the FED to control stock prices. You know if the FED says we're going to determine the value of the stock indexes and over a few years everybody else backs away from market involvement then they may be able to keep the indexes at whatever value they need them to be.

Mon, 12/10/2012 - 14:14 | 3049098 timbo_em
timbo_em's picture

Seriously peeps, if I look at the fundamentals (sovereign debt, household debt, trade deficit, etc.), I don't see any reason why France depsite being downgraded recently still enjoys triple-A GS turbo botox interest rates while Italy is close to collapse?! Italy even has more gold than France.

Mon, 12/10/2012 - 23:09 | 3050764 StychoKiller
StychoKiller's picture

Kinda O.T.:

(from http://dealbook.nytimes.com/2012/12/10/hsbc-said-to-near-1-9-billion-set...):

State and federal authorities decided against indicting HSBC in a money-laundering case over concerns that criminal charges could jeopardize one of the world’s largest banks and ultimately destabilize the global financial system. [emphasis mine!]

Instead, authorities on Tuesday are expected to announce a record $1.9 billion settlement with the bank, according to law enforcement officials briefed on the matter. The bank, which is based in Britain, faces accusations that it transferred billions of dollars for nations like Iran and enabled Mexican drug cartels to move money illegally through its American subsidiaries.

While the settlement is a major victory for the government, the case raises questions about whether certain financial institutions, having grown so large and so interconnected, are too big to indict. Four years after the failure of Lehman Brothers nearly toppled the financial system, regulators are still wary that a single institution could undermine the recovery of the industry and the economy.

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