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.

 

EuroStoxx...

 

Germany ugly...

 

But all European equity indices weak...

 

As peripheral bonds spreads surge...

 

Charts: Bloomberg