EURUSD Slumps To Worst 3-Week Run In 7 Months

Tyler Durden's picture

Europe ends the week very mixed - as real macro data was dismal but sentiment and hope positive. Credit underperforming notably - especially financials - but equity indices varied from a 2% drop in Italy to a 1.8% gain for Switzerland (which seems like a squeeze given positioning). Italian bond spreads also suffered the most this week heading into the election - gaining 15bps. Portugal was the worst on the week with its spread to Bunds rising 18bps. The real news of the week is the EUR which extends its losses - down 1.5% on the week - to the biggest three-week drop in seven months. GBP weakened the most against the USD on the week - down 1.7% as currency wars progress. Europe's VIX closes at its highest of the year at 20.9% - up over 2 vols on the week.

EURUSD slumping...


Europe's VIX closes at the record highs for the year...


as FX markets were not pretty on the week...


And European stocks very mixed...


Charts: Bloomberg

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Stackers's picture

The Powers At Be, will not let the Euro get more than 300bps away from 1.30. Jim Rickards did an excellent job of explaining the 3 way triangle of the Dollar/Euro/Yuan and why 1.30 is the magic number for the system right now

WhiteNight123129's picture

More or less true except if the US recovers a bit, you have a bit more leniency on the FX.

But the FX will be driven by France siding with the South and calling a vote at the ECB. That will be showdown!!!

El Hosel's picture

Raise your hand if you are buying the dip.

Jack Napier's picture

Yup, added to my silver stack this week. Gold's still too overvalued in comparison to silver though, even though both are far undervalued in currency terms.

SheepDog-One's picture

When all you have left is 'hope', then you better cling to it as hard as you can I guess.

WhiteNight123129's picture

What is this blog?

A dangerous bank deposit bubble? A Dangerous deposit bubble? Since when did you see a bank go belly up because they had TOOO MUUUCHH DEPOSITS AAAAH MYY GODD..


Banks have never ever gone belly up because of too much deposits. Find something else.

Zerohedge is getting full retard.


bnbdnb's picture

TBTF banks don't go belly up. Their paper assets do. You know, the ones you are buying from them.

WhiteNight123129's picture

The TBTF assets which can still go belly up are the derivatives, but those are shrinking, for the rest, the main risk is interest rate risk not bankruptcy risk when the FEd multiplies the base money by 4 times. Duration risk mainly. The other risk is deposit flight if the sheeple start to complain too much about the low interest rates, but you can prevent that with capital controls. So not to worry too much, people will get fucked but that is their job.


WhiteNight123129's picture

What is this blog?

A dangerous bank deposit bubble? A Dangerous deposit bubble? Since when did you see a bank go belly up because they had TOOO MUUUCHH DEPOSITS AAAAH MYY GODD..


Banks have never ever gone belly up because of too much deposits. Find something else. The only exception is the excess reserves in deposit at the Fed. If there is a flight of deposit in teh commercial sector, that has a tendency to force the central bank to raise the interest on the excess reserves. If the central bank receives less than it pays on those reserves = hyperinflation. Before that, there will be capital control to prevent those fleeing deposits to blow up the central bank, and also regulated deposit rates. 


falak pema's picture

If the Eur finishes under 1.30 and stays there, Hollande will be very happy. 

All the south wants in Euro zone is for the Euro to go down, to 1.10 if necessary. 

Not so the rentier north. 

WhiteNight123129's picture

By-laws of the ECB say one country one vote, so Merkel is in the Scheiße.

hugovanderbubble's picture

Limassol, Nicosia...Next Black Swan in Mediterranean Sea.


Cyprus is in default.


Then Turkey. Period.



falak pema's picture

short turkey and you get a hybrid hen.

You have to understand that there is only so much tail cutting a turkey will take before he decides he is a hen! 

Understandable, I'd hate having my tail cut and would feel very hennish if I lost it all in a total short cut. 

Navymugsy's picture

I love all the empty shops in Limassol. It means that there certainly was a huge bubble here contrary to the pols and talking heads swearing that nothing of the sort happened.

WhiteNight123129's picture

1. The stock market will fade lower as soon as the economy recovers.

2. The Government is not borrowing right now, and that since 2009

3. The Government can already pay the debt prior to 2009. The money is already available.


All those statements above are actually true, the one who can explain why has graduated to be a trader for real. Beware this is very wicked stuff.

orangegeek's picture

The Euro appears headed for a major fall - channel support was broken.  Could be headed well below 1.20.

WhiteNight123129's picture

There is a rule that says that in fine the printing is done with a vote at the ECB. So far there was no chance of hte vote because France was not siding with Spain and southern Europe and Ireland. But as France is heading south...

Then merkel is in tough spot. She will have to deal with that withe German people. Move to Mark and see exports collapse or shove the stagflation down your throat... she gets fucked either from the front or from the back. It is likely that this is will not come down to wire before German elections.

Than obviously it makes total sense for Dalio to be long periphery debt.

El Hosel's picture

.... It ain't broken if they fix it by Monday morning! Timahhhhh!

rqb1's picture

I'm looking to invest in southern Europe right now.  Maybe start a new business.  Great work ethic there.  Lots of hard working, eager to contribute people who are looking to better their future generations.

MoneyThangs's picture

This recent pullback in equities is a great buying opportunities for a long term investment

Caracalla's picture

I'm moving into Cyprus equities and bonds.  The bottom has been reached there and a huge explosition to the upside is just getting started.

Navymugsy's picture

The Cyprus stock market already lost 90% of its value so you could be right. Or all of those companies could go out of business...