European Bonds And Stocks Slump Most In 6 Weeks

Tyler Durden's picture

The EuroStoxx 50 (Europe's 'Dow') fell over 1% today - not 'huge' but this is the largest drop in over 6 weeks in the key index. While much has been made of the recent (good) performance of peripheral nation stocks and bonds (and Japanese buyers dominate) today marked a notable shift. Record bad debt in Spanish banks, political uncertainty in Italy, and a rise in fringe German political parties weighed on peripheral banks and sovereign bonds (which by now have become one and the same symbiotically) - Spain -2%, Italy -2.5% (biggest drop in 2 months). Greek stocks and bonds also slid notably (ASE -3% and GGBs down most in 6 weeks) as they deal with their own political drama. It appears the ongoing US Treasury sell-off and capital reduction from around the world is weighing on even the most momo assets now. Credit markets are broadly under-performing with financials leading the way.

 

The momo looks broken...

 

and equity weakness was widespread...

 

with credit markets flashing warning signals...

 

Charts: Bloomberg