Europe Opens Down 2% As Sovereign Risk Surges

Tyler Durden's picture


Germany's DAX is the hardest hit so far of the major European equity markets (futures) with a drop of over 2.2% (underperforming the French CAC40 -1.5% for now). The EuroSTOXX 50 is down 2% and reflects the general state of affairs in European equity markets as they open - which is a little worse than the S&P futures market's move since the European close on Friday.  European credit markets are very quiet and illiquid thanks to the UK's May-Day celebrations (and its position as hub for CDS market-making) but sovereign bonds are trading across mainland Europe and are being sold relatively hard so far. Spain, Italy, and Greece are underperforming with the former two pushing towards recent wide spreads even if yields remain off recent highs. EURUSD rallied a little off its overnight lows as Europe opens but has started to give back some of those gains. As the cash markets open there is some buying-the-dip pressure in stocks - even as govvies remain offered while financials remain under significant pressure. US equity futures and Treasuries remain in sync as ES limps a little higher off overnight lows.

10Y Spread to Bunds (in the red box) - green is not good in this case...

And European Equity futures (open in red - closed blue dashes) are all notably lower and underperforming the US-implied move from Friday's European close so far...

Charts: Bloomberg

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Mon, 05/07/2012 - 03:20 | 2402659 PersonalRespons...
PersonalResponsibility's picture

There is no spoon... bitchez

Mon, 05/07/2012 - 06:18 | 2402764 LongSoupLine
LongSoupLine's picture

The PPT spoon for the US futures is active. Went to bed with ES down -14 and now it's down half that...not to mention EUR/usd now "magically" back over 1.30.
Complete horseshit.

Mon, 05/07/2012 - 07:18 | 2402822 maxmad
maxmad's picture

ES fair market value still down 13 at the open (-7.50 plus the 6.50 from fridays close!)  Collapse!

Mon, 05/07/2012 - 07:26 | 2402834 Boilermaker
Boilermaker's picture

I think you might have missed the obvious point.

Mon, 05/07/2012 - 03:25 | 2402665 mholzman
mholzman's picture

Soon, it be thw E.U.S.R. or Russope. While it all collapses, Russia still has the most in natural assets.

Mon, 05/07/2012 - 03:38 | 2402672 Mister Ponzi
Mister Ponzi's picture

If people like Schulz or Cohn-Bendit could act as they liked, we would already have GuLags for dissidents in Europe. Resembles the orginal more and more every day.

Mon, 05/07/2012 - 05:16 | 2402717 Soul Train
Soul Train's picture

The ES Risk On party is over. Minimum three months of heavy down chop. Gold remains the new haven for security through the ES deflation.

Ben's bluff is called. Let's see what the Fed mouths to mesmorize the herd.

Mon, 05/07/2012 - 03:29 | 2402667 LMAOLORI
Mon, 05/07/2012 - 03:34 | 2402670 Alejandrito
Alejandrito's picture

Friday spain´s government will help Bankia with a billionare injection money. More public money for banks.

Mon, 05/07/2012 - 03:39 | 2402673 ZeroIQ
ZeroIQ's picture

So where's the trade here... Im thinking buy the fucking dip and short EU banks into hell? Long popcorn?

Tyler's event calendar sure had a lot fun still to come. Bond issues this week.. Negotiations on couple of billions in austerity...Tyler, when do you sleep?

Mon, 05/07/2012 - 04:29 | 2402700 slaughterer
slaughterer's picture

If you are going to short Eurobanks, short UBS and CS.  I think STD will pull a rabbit out of the hat soon.  

Mon, 05/07/2012 - 03:47 | 2402677 Dick Darlington
Dick Darlington's picture

Epic collapse in Spain Industrial output (March data out this morning): work day adjusted -7,5% YoY, not seasonally adjusted -10,4% YoY

Mon, 05/07/2012 - 03:55 | 2402681 Change-In-Trend
Mon, 05/07/2012 - 05:37 | 2402737 TWSceptic
TWSceptic's picture

Interesting, but what is it based on?

Mon, 05/07/2012 - 05:57 | 2402752 Non Passaran
Non Passaran's picture

On that moron's need to spam the page with URLs pointing to his worthless blog I guess...

I have no need to buy since I am all in:-)
But I may borrow and buy more in case of a 5+% correction.

Mon, 05/07/2012 - 04:04 | 2402687 Peter K
Peter K's picture

Looks like Euroland is fixed. Thank's for everything Nick ;)

Mon, 05/07/2012 - 04:55 | 2402696 q99x2
q99x2's picture

“cancel the memorandum of barbarity,”

40 Percent Upward Move in Stocks Coming

Mon, 05/07/2012 - 04:37 | 2402701 slaughterer
slaughterer's picture

London on holiday today: is it a coincidence?

French BTS auctions today: is it a coincidence?

GS Jim O'Neil frontloading QE3 today: is it a coincidence?

Spain announcing its "bad bank" today: is it a coincidence?

From what I see, it is a BTD day, not a liquidation trade day.  


Mon, 05/07/2012 - 04:57 | 2402711 DutchDude
DutchDude's picture

SSDD in Europe...

Mon, 05/07/2012 - 05:15 | 2402714 slaughterer
slaughterer's picture

EUR/USD hovering above 1.3000 as Middle East and Eastern Europeans buy it up.  (Option block already hit in overnight).

DAX recovering slowly as German traders buy it up.  (BMW and VW both reporting China-driven increases in sales).

FED desks pumping ES up to nearly unch by 9.29am EST.

Mon, 05/07/2012 - 05:56 | 2402753 fonzannoon
fonzannoon's picture

Yup...just another sleepless night for some people.

Mon, 05/07/2012 - 06:04 | 2402756 navy62802
navy62802's picture

Well, the PPT didn't get the euro-dollar back up to 1.35, but they were able to keep it above 1.30.

Mon, 05/07/2012 - 06:06 | 2402759 fonzannoon
fonzannoon's picture

The euro is green. They will have Buffet pounding the table for 3 hours. It will go on and on.

Mon, 05/07/2012 - 06:18 | 2402768 Boilermaker
Boilermaker's picture

ES will be flat by the open. How shameless can these fuckers get? Seriously??? They're going to reverse out a 16 handle drop overnight?


Mon, 05/07/2012 - 06:28 | 2402778 slaughterer
slaughterer's picture

It's our heard earned tax dollars at work.  

Mon, 05/07/2012 - 06:30 | 2402779 slaughterer
slaughterer's picture

Plus massive "beat" (think BLS Deutschland) on German manufacturing helped alot.  

Mon, 05/07/2012 - 06:36 | 2402783 lakecity55
lakecity55's picture

Timmah? Are the presses prepped? Our comrades in Euroland need help with more taxpayer funding!

Sure, Bennie.

Mon, 05/07/2012 - 06:43 | 2402788 youngman
youngman's picture

Amazing to me how the Euro is holding me it should be at par by now....and then the Yen will be the talk of the it should be...I know the markets are rigged...but how are they fixing the FX markets.....Who would want Euros???

Gold and Silver doing nothing....i would be running to those...but no..they go to the 10 year paying 1.89%....I am lost

Mon, 05/07/2012 - 07:07 | 2402805 Bahamas
Bahamas's picture

Juventus just won the Italian Championship and its stock is losing 7% value on the Italian stock that's strange

Mon, 05/07/2012 - 07:35 | 2402846 Boilermaker
Boilermaker's picture

-5 handles now... about a fucking sham.  You have to be joking.

CNBC Breaking News:  "Warren Buffett: We Were Buying Stocks Friday, and We're Buying Them Cheaper Today (Click for Full Story)"


Mon, 05/07/2012 - 08:00 | 2402874 Bastiat009
Bastiat009's picture

Europe is up. The euro is up. Gold is down. Get used to it. Central banks can press the zero key forever. A large majority of people believe that spending leads to growth and those people vote ... and bankers smile.

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