European Peripheral Bond Spreads Surge As Germany Suffers Worst 2-Week Run Since 2011

Tyler Durden's picture

GDP-weighted average sovereign risk for European nations has risen 14% in the last 2 weeks - the most since Nov 2012. European peripheral bond spreads finally started to 'adjust' for real risk this week with a dramatic 30-40bps decompression from the early week's tights to the closing wides. Portugal was worst (+23bps on the week) followed by Italy and Spain. Stocks were hammered - EuroStoxx 600 2-week drop is the biggest since May 2012 and Germany's DAX 2-week drop is largest since Nov 2011.




Germany ugly...


But all European equity indices weak...


As peripheral bonds spreads surge...


Charts: Bloomberg

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Dr. Engali's picture

10% controlled pullback on the DAX. Just what the QE central planners ordered. BTFD.

walküre's picture

All the German sheep have been told to buy stocks for months now. There's been real money lost and German gamblers got burned. Is the slaughter over?

Dr. Engali's picture

First of al, it's not real money, and secondly you don't lose if you don't sell.

Temporalist's picture

This has to be some kind of metaphor...I wonder what...nahhhh...


Google Street View Car In Wrong-Way Crash

"AUGUST 7--A Google Street View car that was traveling in the wrong direction on a one-way street crashed into another vehicle last night as it attempted to make a U-turn, Arkansas police report."


The only way it would be more ironic is if it had no driver.

ebworthen's picture

Cue Draghi making a "Whatever it takes" comment.

If this keeps up (reality) cue Janet talking dovish, and Japan going to 300% debt/GDP.

The Keynesian camp debt delusion has taken hold; they will grind this down to the nubbins.

Sanity be damned.

Ness.'s picture

And yet equities take another leg higher.  Too funny.



Winston Churchill's picture

Costs, and fuck the EU.

With the nuke threat hanging over their heads, they just plead for more, and moarer.

Jack Sheet's picture

The DAX was pumped up by the Japanese central bank like an obese Oyabun on top of a Geisha, amongst other central banks who reportedly bought 29 trillion $ worth of equities (so in reality much more) and participants in the EUR/JPY carry trade. Now the viagra has worn off but doubtless another intravenous infusion will be forthcoming.

BTFD in German: kauft den fickenden Rueckschlag.

JustObserving's picture

As if there is any chance that any of the peripheral European states can ever pay back their long term bonds.

And the US is in the worst shape of them all with unfunded liabilities of $244 trillion and rising at $11 trillion a year per Kotlikoff.

Not to worry, the Nobel Prize Winner has an excellent solution for that. It's called the audacity of hope.