European Credit Buying The Rumor; European Stocks Not So Much

Tyler Durden's picture

Whether it is "buying-the-rumor" to "sell tomorrow's news" or some contagion from domestic bank-to-sovereign credit arbitrage, European credit markets are giddy with the Draghi rumors. European sovereigns are better but are leaking back a little now - with 2Y limping higher in yield. European stocks seem thoroughly unimpressed for now broadly-speaking (despite EUR strength helping drag US equities higher?) The world, it seems, has no idea what is going on once again... and then Merkel adds this:

  • *MERKEL TELLS LAWMAKERS SHE OPPOSES UNLIMITED ECB BOND PURCHASES
  • *MERKEL CAN ACCEPT TEMPORARY ECB BOND BUYING, BARTHLE SAYS
  • *MERKEL CAN ACCEPT ECB BOND BUYING OF SHORT MATURITIES: BARTHLE

Which sends EURUSD into spasm...

 

European stocks (blue) not impressed as European credit rallies handsomely...

 

Or is credit catching up to equity's hope...

 

with most practically unch...

 

 

but could it be driven by the Short Sovereign, Long Domestic bank arb?

 

and EURUSD has been very volatile this morning...

 

and this absolute nonsense - which sums up the European idiocy perfectly:

Sept. 5 (Bloomberg) -- Chancellor Angela Merkel told lawmakers in Berlin today that she supports both European Central Bank chief Mario Draghi and Bundesbank President Jens Weidmann even as they spar over ECB bond-buying proposals, two participants in the closed-doors meeting said.

 

Merkel said that both Draghi and Weidmann are carrying out their respective mandates, the party officials said on condition of anonymity because the meeting was private. Merkel told the lawmakers that she therefore sees no contradition in supporting them both, the officials said.

Charts: Bloomberg