Austria, Belgian Bonds Crushed

Tyler Durden's picture

Yesterday we posted a note on Austria, titled "35 Seconds Of TV Air Time Explaining Why Austria's AAA Rating Is Doomed" which among other things demonstrated in very vivid fashion, why courtesy of its massive Hungarian and broadly Eastern European exposure, an Austrian downgrade is virtually imminent. The follow up news that the Austrian Central Bank has henceforth forbidden any incremental Eastern European loan issuance is merely the cherry on top, and confirms that Austria's biggest banks are now on the verge. As the chart below demonstrates which shows Austria benchmarks (which like Spain we expect will be promptly changed to a lower yielding piece to buy 1-2 days of breathing room), the hammering has returned. And elsewhere, Belgium is also getting annihilated as the ECB is now left with far too many plates to juggle.

Austria

Broad European bond yield change:

For those who missed it, here is a TV ad explaining Raifeissen bank loan issuance practices