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Euro Drops Under 1.3000 Following Record High Yield On Italian 5 Year Auction

Tyler Durden's picture





 

And so the inevitable has happened: the European currency finally fell below that strange attrractor level of 1.3000 following an Italian 5 year auction that despite the "technical" clarification that it would be of Off The Run bonds, still ended up being the highest rate ever paid for a 5 Year piece of Italian paper. As Reuters explains, the euro slipped versus the dollar on Wednesday after Italy paid a euro era record yield of 6.47 percent to sell five-year debt, adding to concerns that an EU summit last week had made little progress in tackling the region's debt crisis. More: "Italy paid a euro era record yield of 6.47 percent to sell five-year paper at its first auction of longer-term debt after the EU moved towards greater fiscal integration at last week's summit, but failed to convince markets it can solve the debt crisis. The average yield at Wednesday's sale compares with an auction rate of 6.29 percent Italy paid a month ago, which was also a euro lifetime record high. Rome sold 3 billion euros of the Sept. 2016 BTP bond, the top of an unusually small range of 2 billion to 3 billion euros for the sale. Italy has trimmed the size of its auctions in reaction to market pressure but it will have to step up issuance in coming months if it is to meet a gross funding goal of around 440 billion euros next year." And result: EURUSD < 1.3000 which means bad things for the record high correlated stock market... and the Christmas Rally.

 


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Wed, 12/14/2011 - 07:57 | Link to Comment cossack55
cossack55's picture

Will all the DMs, Krones, Lire, Francs and Pesetas that I have stuffed in numerous beer steins and have not seen for 20 years be worth anything soon?

Wed, 12/14/2011 - 08:03 | Link to Comment slaughterer
slaughterer's picture

It is dead, Jim. 

Wed, 12/14/2011 - 08:05 | Link to Comment slaughterer
slaughterer's picture

All those "beer Stein currencies" should be back in circulation  in a month or so. 

Wed, 12/14/2011 - 08:06 | Link to Comment I think I need ...
I think I need to buy a gun's picture

gld has collapsed below trend for first time since 08.....no volume either first time in 3 years.....they looted all the gold...ita all over

Wed, 12/14/2011 - 08:39 | Link to Comment Socrate
Socrate's picture

Euro in a tailspin, bitchez.

Wed, 12/14/2011 - 08:00 | Link to Comment Iriestx
Iriestx's picture

Since when do any sort of fundamentals have anything to do with a stock market rally?

Wed, 12/14/2011 - 08:04 | Link to Comment Irish66
Irish66's picture

the euro is in its last stage

Wed, 12/14/2011 - 08:09 | Link to Comment supafuckinmingster
supafuckinmingster's picture

Irish66: Is that comment based on anything or wishful thinking on your part? No sarcasm intended....just wondering if you know anything I don't.

Wed, 12/14/2011 - 08:15 | Link to Comment Irish66
Irish66's picture

last week at least 10 companies and or banks announced the preparation  for the end.

the stress test and now the fed doing nothing.  

Wed, 12/14/2011 - 08:24 | Link to Comment supafuckinmingster
supafuckinmingster's picture

Thanks Irhis66

Wed, 12/14/2011 - 08:52 | Link to Comment boiltherich
boiltherich's picture

So did Russia Irish.  I saw a crawler on the Bloomberg ticker a couple days ago where Russia announced it was well prepared for the collapse of the euro.  But, try finding any financial news out of Russia when there are huge demonstrations of upset voters in Red Square, all I could find related to vote frauds.  Bloomberg itself is practically unsearchable in it's new format.  And I had posted a story about Tesco last week saying it was positioning for the end of the euro, no long term contracts and such.  The point is that when players outside of the Merkozy hacks lose faith then it does not matter what the heads of state decide to do, it becomes a self fullfilling prophecy. 

From FT:

Car manufacturers, energy groups, consumer goods firms and other multinationals are taking care to minimise risks by placing cash reserves in safe investments and controlling non-essential expenditure.  Siemens, the engineering group, has even established its own bank in order to deposit funds with the European Central Bank.

http://www.ft.com/intl/cms/s/0/25ab975a-1a9f-11e1-ae14-00144feabdc0.html#axzz1gVqIxDsS

 

Wed, 12/14/2011 - 08:57 | Link to Comment Irish66
Irish66's picture

thanks..didn't see that article.

Wed, 12/14/2011 - 08:06 | Link to Comment Dick Darlington
Dick Darlington's picture

What we need is coming: ANOTHER EU SUMMIT!

FRANCE AND GERMANY WANT A EURO ZONE SUMMIT ON GROWTH, COMPETITIVENESS AND JOBS IN JANUARY - FRENCH GOVT SPOKESWOMAN

 

ROFLOL!

Wed, 12/14/2011 - 08:11 | Link to Comment Bobbyrib
Bobbyrib's picture

They need to further rig the EU in their favor. Keep the EU going so they can profit, while the PIIGS struggle to pay off their debts. If you're not France or Germany, drop out of the EU to save your country's sovereignty before it is too late.

Wed, 12/14/2011 - 08:13 | Link to Comment SLOMO66
SLOMO66's picture

If the 'non-event' just gone was any guide to future summits, that one will ba a complete failure too.

Wed, 12/14/2011 - 08:09 | Link to Comment sampo
sampo's picture

JAlso paper silver. Actually the best thing that could happen to silver market right now would be the price to go down to say, 4 cents. Oops, JPM might get away with it then. Double Oops, did I expose their strategy?

Wed, 12/14/2011 - 08:12 | Link to Comment cossack55
cossack55's picture

If that happens, forget the dually, I'll need a dump truck (tri-ax).

Wed, 12/14/2011 - 08:28 | Link to Comment sampo
sampo's picture

If that happens, you ain't gonna see physical under $500.

Wed, 12/14/2011 - 08:10 | Link to Comment youngman
youngman's picture

Gold and silver are tanking again today....who would want that relic when the western world is collapsing..got me?????...wierd...but guns and ammo sales are up..maybe people are cashing in and buying those....hmmmmmm

Seriously...I bet we find a central bank dumping in desperation....time will tell

Wed, 12/14/2011 - 08:14 | Link to Comment cossack55
cossack55's picture

Did you see the story where Cerebus (?)(Chrysler) is buying up gun mfgs, including Remington. Hmmmmm!!!!

Wed, 12/14/2011 - 08:24 | Link to Comment AUD
AUD's picture

You might find this interesting.

Wed, 12/14/2011 - 08:35 | Link to Comment Captain Benny
Captain Benny's picture

I'm sure that ammunition sales are up big time.  I just placed a weapons order that makes my previous purchases look as mundane as buying a bag of M&Ms at the supermarket checkout.  No guns, no safety.  Normalcy bias is strong in the western world.

Wed, 12/14/2011 - 08:11 | Link to Comment MFL8240
MFL8240's picture

What do the whores have in mind today?  Perhaps another $50 down in Gold and 200 points up in the DOW and USD higher?  Makes sense, this all makes sense if you are from Mars.  Gold down with the Euro zone in the final stages of its collapse, the US living on borrowed time, the Federal Reserve lying to the people as it continues buying 100% of the US debt, the US economy considered to have bright spots fabricated by false and misleading government reports, The US dollar (Confetti) over 80cents (laughable) as the banking bandits continue printing at will, the middle east ready to explode into WWIII, China and India collapsing and yet, the whores on Wall Street and in the sewer of Chicago say up we go with stocks, bonds and confetti and down we go with real money.  The objective is to destroy the entire years gain in Gold and force people out and into paper assets worth nothing more than the ink.  The Bernanke machine is all over this fabrication and best people understand that this Jewish banking cartel is corrupt this whole situation smells like hell.

Wed, 12/14/2011 - 08:41 | Link to Comment El Gordo
El Gordo's picture

Buy, buy, buy.................

Wed, 12/14/2011 - 08:13 | Link to Comment bernorange
bernorange's picture

How long before the Fed intervenes to weaken the dollar?  Can't let the Euro reach the bottom with too big a lead or the US export economy goes poof.

Wed, 12/14/2011 - 08:18 | Link to Comment MFL8240
MFL8240's picture

When they complete their plan to destroy the value of paper gold they cannot deliver to protect thier friends at the CME.  This is payback for the 8 margin increases they used to steal your money.  Great country though!

Wed, 12/14/2011 - 08:16 | Link to Comment JustObserving
JustObserving's picture

Collapse in silver is spectacular.  With only $30 billion or so in worldwide bullion (1 billion ounces), it is very easy to manipulate silver.

Cannot believe that the dollar is so strong with US debt and unfunded liabilities rising by $23.8 billion everyday per usdebtclock.org. That is enough to buy 80% of the world's silver bullion every day.

We live in a bizzaro world where fiat money rules.

Wed, 12/14/2011 - 08:18 | Link to Comment Spooky Polish
Spooky Polish's picture

Where the fuck is Santa Claus
Bring the Deutche Mark "Raus!"
Euro keeps looking dead
Even with printing FED

excuse my english

Wed, 12/14/2011 - 08:20 | Link to Comment topcallingtroll
topcallingtroll's picture

I hope Ben is not too timid to use this opportunity that was given him.

Wed, 12/14/2011 - 08:25 | Link to Comment longonSpam
longonSpam's picture

When the yield hits 120 & they announce THEIR 50% haircut that won't be a credit event either. Can we stop the merry-go-round yet? I'm nauseous.

Wed, 12/14/2011 - 08:28 | Link to Comment longonSpam
longonSpam's picture

Bitchez

Wed, 12/14/2011 - 08:28 | Link to Comment supafuckinmingster
supafuckinmingster's picture

So good you named it twice?

Wed, 12/14/2011 - 08:31 | Link to Comment longonSpam
longonSpam's picture

I got Bernanked.. Bitchez

Wed, 12/14/2011 - 08:28 | Link to Comment TradingJoe
TradingJoe's picture

Printing will commence very soon!

Wed, 12/14/2011 - 08:36 | Link to Comment aleph0
aleph0's picture

@Euro down hard :

 

... the Blithering Brusseler BEUrocrats are being shown who's the boss.

Now they'll be saying  a weak Euro is good for exports .. after boasting about how"strong" the Euro was 1 year ago... and possibly the new Reserve Currency / LOL

I'll be glad when these Idiots in Brussels are unemployed.

 

Wed, 12/14/2011 - 08:38 | Link to Comment Iliketurtles
Iliketurtles's picture

Printing is not going to happen soon, fed minutes explicity said so. Been saying printing is going to happen for months now and still waiting. People fail to understand that already high food and gas prices limits the fed in its wish to print.

Wed, 12/14/2011 - 08:42 | Link to Comment longonSpam
longonSpam's picture

The aliens are bringing McDonald's with them.

Wed, 12/14/2011 - 08:53 | Link to Comment youngman
youngman's picture

I think he already is printing..his EU Bank liquidity is printing in my mind....they probably have several other under the table devices going on...if their balance sheet keeps getting bigger and bigger..that is printing...

Wed, 12/14/2011 - 08:58 | Link to Comment Iliketurtles
Iliketurtles's picture

You have a good point, fed is "printing" in other ways as you stated.

Wed, 12/14/2011 - 09:03 | Link to Comment MFL8240
MFL8240's picture

Really?  You know very little about what you write.  Here is a wakeup call and suporting documentation, printing never stopped, not even for an hour!  

 

http://www.financialsense.com/node/7014

 

 

 

 

Wed, 12/14/2011 - 08:55 | Link to Comment lolmao500
lolmao500's picture

Dollar going to 120-130. Which is totally ridiculous.

Wed, 12/14/2011 - 09:23 | Link to Comment Dutch_Gemma
Dutch_Gemma's picture

Well it is interesting that whilst rates were at around 6,5% for the Italian bonds, they were still 40% oversubscribed.

 

I do wonder what price the US treasury would have to pay if it actually had to sell all their bonds on the open market - and let speculators play with their precious rates.

 

Oh, and when was the last time Italy actually defaulted outside of a war? Was it in the 1880s?

Wed, 12/14/2011 - 10:18 | Link to Comment zippy_uk
zippy_uk's picture

Euro not dead yet.

Need to go through a phase of capital controls and another 10 "Last chance to save the Euro" meetings first before the people France get a say on who their leader is and kills the whole thing dead.

Hold on to your hat...

Wed, 12/14/2011 - 10:33 | Link to Comment zippy_uk
zippy_uk's picture

Tyler - any chance of getting a proper post on this clip of Nigel Farage / Sky News discussing the Euro ?

I think it would go best personally with some suitable charts of Bonds / EURO currency just to provide some added colour to the different views of the EUROs future.

http://www.youtube.com/watch?v=3uGwL6gxkJo

Are you watching Merkel / Germany ?

Wed, 12/14/2011 - 13:29 | Link to Comment dcb
dcb's picture

now the algo's have me crazy, bevvcause everything trades so strange. when we do a channle, at this point, there has alwyas been a rise is in the euro, but this time the macd is really giving a dollar bull signal. uup is also above the bollenger bands and things move usually in from there. So not sure, but also the banks says trand continued.

Wed, 12/14/2011 - 13:49 | Link to Comment dcb
dcb's picture

the other thing that is screwed up, for me at least, doinng my trading system the s and P is still well over bought and emerging markets is a good potential entry point. before these two have usually been about on the same lines so it didn't matter what I traded. this is very unusual

Wed, 12/14/2011 - 13:41 | Link to Comment Grand Supercycle
Grand Supercycle's picture

SP500 daily chart resumes choppy downtrend. Opposite for USDX.

My long term indicators have continued to warn of USD strength and EURO weakness and these signals have increased since 2009. The overdue dollar rally should be substantial.

http://stockmarket618.wordpress.com

Wed, 12/14/2011 - 13:57 | Link to Comment dcb
dcb's picture
I agree 100% the question is trading it to max gain.  I thend to use macd, speed line and channels with some rsi
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