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Greece Jumps Most In 8 Months As Rest Of Peripheral Europe Slumps

Tyler Durden's picture





 

The Greek equity index jumped almost 7% today, its biggest rise in 8 months, on the back of absolutely no 'real' change whatsoever (Greek opinion poll results change by the second and the stability fund payments were already known) and indeed a worsening situation across most of the rest of Europe (ex-Germany) - with chatter of growing bank runs and Bankia's epic demise. Of course, one needs to bear in mind the ASE pop is off 22-year lows before sounding that all-clear here as Bund yields collapse to all-time record lows and Spanish yields (and spreads) to Euro-era record wides (and almost all-time record highs). Broad European equities and credit gapped up at the open (as did EURUSD) but the rest of the day was spent drifting inexorably back to lows as the Euro-Stoxx ended down 0.5% (with Spain - at 9 year lows - and Italy underperforming notably also - with banks halted on and off all day). Spain and Italy saw sovereign spreads leaking (16bps and 8bps respectively) as the former broke 450bps over AAA for the first time (and 510bps over Bunds). Corporate and financial credit spreads leaked back wider from the positive start to the day and ended still modestly tighter on the day - though financials notably underperformed non-financials. EUR-USD basis swaps improved modestly but EURUSD round-tripped from a decent open to Thursday/Friday highs over 1.26 and back down towards Friday's close - with the USD -0.2% from Friday's close - as AUD strength helped exaggerate the move mildly. Commodities are following USD's lead and as it strengthens into the European close, they are losing early gains (Copper/Oil up around 0.6%, Gold Unch, Silver down 0.5%). USD and Oil weakness into the European close were the most notable micro-trends.

The Athens Stock Exchange Index jumped almost 7% today - the last 2 times it did this was followed by 4-5 down-days in-a-row - don't hold your breath...

and Spain's IBEX Index fell over 2% closing at its lowest level in 9 years...

European sovereigns limped wider aside from Spain and Italy which ended at the day's worst levels (and the former near all-time record wides)...

and for once European stocks in general front-ran credit - though it looks like equity just catching up to last week's credit deterioration (also financials underperformed non-financials into the close)...

and the USD (and EURUSD implicitly) round-tripped (orange curve) as once the US came on line (630am ET) admittedly a closed market, AUD began to drift lower (red arrow) relative to USD which dragged on US equity futures which were also trading - closing near ther session lows (but up around 6pts - though 8pts off the overnight highs (notably rich to broad-risk-assets - though we note TSYs not open to temper reality)...

Charts: Bloomberg

 


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Mon, 05/28/2012 - 12:03 | Link to Comment NERVEAGENTVX
NERVEAGENTVX's picture

So now opinion polls are the primary driver of Greek markets? LOL

Mon, 05/28/2012 - 12:24 | Link to Comment Tyler Durden
Tyler Durden's picture

From May 23:

With the only real catalyst on the horizon not due for nearly one month - that would be the Greek elections of June 17 which while presented as the make or break event for the Eurozone, we believe will be once again inconclusive, resulting in no actual government, but merely more elections down the road - here is the daily sequence of events of what we can expect: i) Europe releases definitive rumor that everyone is preparing for a Greek exit full of bombastic jargon and details of how Greece will be annihilated if it does exit the EMU; ii) immediate election polls are taken; iii) if "anti-memorandum" Syriza support is not materially lower, rumor is promptly withdrawn for the day, only to be unleashed the next day with even more bombastic end of world adjectives describing the 9th circle of hell Greece will enter unless the Greek people vote "for" the pro-bailout parties, "for" the Euro, and "for" a perpetuation of the status quo; iv) Rinse; v) repeat. Which means one thing: just as the most actively watched live update on June 17 will be the Greek parliament seat map as voting is tallied, so each and every day from now until then, everyone's attention will be glued to daily update from Greek election polls.

Mon, 05/28/2012 - 12:33 | Link to Comment max2205
max2205's picture

Cant wait for those rips. Not

Mon, 05/28/2012 - 13:17 | Link to Comment Sam Clemons
Sam Clemons's picture

What about Ireland?  Shouldn't they (their creditors) be needing another bailout soon?

Mon, 05/28/2012 - 13:55 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

angela's opinion = ?

here's the polling thru the five polls taken on the 26th:

GR_GreecePolls.swf

gPap will put the close on forPasok and his heavyweight finance guy, evangelosV coming down the stretch, just before the vote, imo

antonioSam's clothing-optional newDparty + pasok = 48% from this

they may be able to govern?  antonioSam & gPap were room-mates in college!  and they are gonna stay in the EU till they conquer it or bring it down?  goooTeam!

the greek badBoyz don't all work for the bankster-fascist-uber-MIC cabal, is what i get from greece;  they are more independent;  whether they can be conquered without arms is doubtful;  just guessing, tho;  their supply lines of do-re-mi may be under siege, eh?

i think greece should join america as a state;  the banksters would shit!   bring taiwan in, too!  just to be fair, ok? 

direct flights from vegas every 30 min!

slewie's plan to fix america!  out-delaware the shitheads! 

and malasia just went WAY up to the top of the list too!  L0L!!!

IT'S OFFICIAL - George W. Bush is a War Criminal   By Yvonne Ridley in Kuala Lumpur

 

Mon, 05/28/2012 - 16:44 | Link to Comment disabledvet
disabledvet's picture

Greece can't be "ejected." Germany must now "complete the mission" of saving Greece (even though Greece will despise them for a century for "how the rescue went down.) As a consequence the euro must get SLAMMED.

Mon, 05/28/2012 - 23:29 | Link to Comment ZeroAvatar
ZeroAvatar's picture

Textbook 'Dead Cat Bounce'.

Mon, 05/28/2012 - 12:09 | Link to Comment NERVEAGENTVX
NERVEAGENTVX's picture

Maybe the Tooth Fairy or the Easter Bunny could chime in and let everyone know how bullish things should be. Couldn't hurt at this point.

Mon, 05/28/2012 - 12:07 | Link to Comment evolutionx
evolutionx's picture

Spanish, Itlalien Yields EXPLODING

 

ES 10y now 6,5%

 

http://www.cds-info.com

Mon, 05/28/2012 - 12:20 | Link to Comment Non Passaran
Non Passaran's picture

Hey bozo

1. Don't spam the comments

2. Spellcheck your posts 

3. Lower- and title-case without bolding are sufficient

 

Mon, 05/28/2012 - 12:09 | Link to Comment Dapper Dan
Dapper Dan's picture

???

Greece's 4 big banks get recapitalization funds, source says - @Reuters
Mon, 05/28/2012 - 12:10 | Link to Comment lailapa
lailapa's picture

GREECE ranks among the witches of Salem

Germans plunge Europe into a new Medieval Era.
Protestants have once again taken up their favorite sport, witch hunt.

Are they ready to take that risk ?

http://eamb-ydrohoos.blogspot.com/2012/05/greece-among-salem-witches.html

Mon, 05/28/2012 - 12:42 | Link to Comment The Alarmist
The Alarmist's picture

Q: What do you do with witches?  

A: Burn them!

Q: And what do you burn besides witches?

A: More witches!

Mon, 05/28/2012 - 12:18 | Link to Comment RobotTrader
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The "Countdown" begins.

Will the ECB simply sit back and watch things implode?

I doubt it.

Mon, 05/28/2012 - 12:26 | Link to Comment THX 1178
THX 1178's picture

What can the ECB do that will not result in implosion?

Mon, 05/28/2012 - 23:33 | Link to Comment ZeroAvatar
ZeroAvatar's picture

No, there's been quite a bit of talk about 'the ECB printing' lately.   And print they will.  Oh, boy, will they print!

Mon, 05/28/2012 - 12:29 | Link to Comment Snakeeyes
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And the parties in Greece are now talking accepting austerity again, so yields came down.

http://confoundedinterest.wordpress.com/2012/05/28/another-day-on-the-med-greece-improves-spain-and-bankia-slide/

But a good riot or two will take care of that!

Mon, 05/28/2012 - 12:34 | Link to Comment max2205
max2205's picture

Bounce cat dead

Mon, 05/28/2012 - 12:36 | Link to Comment max2205
max2205's picture

With Greece priced in euros, albeit discounted, the exchange risk on greece stocks must be unbearable for longs

Mon, 05/28/2012 - 12:40 | Link to Comment Snakeeyes
Snakeeyes's picture

But Greek banks took the tribute and can now go to the ECB feeding trough for more $$$. Die another day.

May 28 (Bloomberg) -- The Hellenic Financial Stability Fund disbursed 18 billion euros ($23 billion) to Greece’s four biggest banks as part of a recapitalization plan that may enable the lenders to return to the European Central Bank for funding. The funds were paid today, Panayotis Thomopoulos , head of the fund, said in a phone interview. The banks will receive bonds issued by the European Financial Stability Facility, which approved the transfer last week.

National Bank of Greece SA, EFG Eurobank Ergasias SA, Alpha Bank SA and Piraeus Bank SA are relying on the Bank of Greece’s Emergency Liquidity Assistance program for funding after being cut off from the ECB because their core Tier 1 capital ratios, a measure of financial strength, dropped below 8 percent.

http://confoundedinterest.wordpress.com/2012/05/28/another-day-on-the-med-greece-improves-spain-and-bankia-slide/

Mon, 05/28/2012 - 12:43 | Link to Comment The Alarmist
The Alarmist's picture

There is still publicly traded equity in Greece?

Mon, 05/28/2012 - 12:52 | Link to Comment lolmao500
lolmao500's picture

As ALWAYS ALWAYS ALWAYS ALWAYS... SILVER DOWN... Silver, more hated than Facebook.

Mon, 05/28/2012 - 13:30 | Link to Comment Trimmed Hedge
Trimmed Hedge's picture

Don't worry... I'm sure it will be back at $50 in no time....

Mon, 05/28/2012 - 12:57 | Link to Comment Trimmed Hedge
Trimmed Hedge's picture

There's gotta be some decent bargains in the Greek non-financial sector at this point, no..?

Mon, 05/28/2012 - 16:55 | Link to Comment The Monkey
The Monkey's picture

Talk about trying to catch a falling knife!

Mon, 05/28/2012 - 13:08 | Link to Comment q99x2
q99x2's picture

Oh what torture.

Mon, 05/28/2012 - 14:25 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

 

carry trade:

  • sell U$D from the mountain-top
  • buy greequities at sea level

 

Mon, 05/28/2012 - 15:07 | Link to Comment Frastric
Frastric's picture

Relax; the Greece stock market is only partying like it's 1999!

Mummy; why is everyone preparing to default?

Mon, 05/28/2012 - 15:17 | Link to Comment worthchanging
worthchanging's picture

is it not the Greek bank recapitalization that's to blame for the ASE jump?

Mon, 05/28/2012 - 15:32 | Link to Comment Olympia
Olympia's picture

 

So, now that some unruly Northern European suggest Greece to sell its islands at a bargain price, they will not like it if that actually happens. They will not like it because selling the islands is not only about selling land where rooms to let will be built. Greek islands have multiple uses and can serve as parameters in various kinds of games. Instead of selling, the Greeks could rent land on the islands. It is the same as with the Chinese Shipping Company Cosco that has an interest in the port of Piraeus and the German construction company Hoch-Tief that has taken over control of the airport in Athens.

Can anyone imagine the geopolitical implications if we rent part of the island of Kythira to the Russians for a hundred years, for example? To what extent would the balance of power change in Eastern Mediterranean if the Bear set its foot in the Aegean Sea?  To what extent would the balance of power change if the Russian fleet dropped anchor permanently there? To what extent would such a naval base influence the defense of the unruly Northern Europeans? It would be a base that among other things could commit Russia to provide Greece with help in case the Turks challenged the Greek sovereignty in the Aegean Sea and anywhere else there are Greek interests.

So, there is a question posed to those who love accounting. How many hundreds of billions of Euros is a naval base worth in the middle of the Aegean? How many hundreds of billions of Euros do the Europeans make because Greece provides for their defense as well? Who is the deadhead in this case? Is it Greece which provides its aircraft carriers or The Netherlands that chips in a few crates of beer for the common defense? Things are simple. Until now, the Europeans could play it smart by paying a pittance. They know Greeks will protect their interests even if it means dying, so they hide behind these interests to pay a pittance. What will happen, though, if the Greeks decide to follow their example? What will happen if the Greeks decide to pay a pittance and they hide behind the Russian interests, which are anti-European by nature?

 

 

 

Panagiotis Traianou answers to many of the aforementioned questions and gives a proper solution on his article entitled “GREECE RANKS AMONG THE WITCHES OF SALEM”

 http://eamb-ydrohoos.blogspot.com/2012/05/greece-among-salem-witches.html

 

Mon, 05/28/2012 - 16:46 | Link to Comment disabledvet
disabledvet's picture

DO hold your breath for "these are breathtaking events indeed." now excuse me while I throw the dog his favorite stick....

Mon, 05/28/2012 - 17:57 | Link to Comment Mentaliusanything
Mentaliusanything's picture

The children states are sick and weakened. The parents who have been tending the little ones don't yet understand that this illness is contagious.

When Mumma gets sick all the children will have nothing to eat.

Isolation is the only cure

Mon, 05/28/2012 - 18:12 | Link to Comment hornster
hornster's picture

Short squeezes will save the world I guess.

Mon, 05/28/2012 - 22:48 | Link to Comment HungrySeagull
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One big fat Greek bottom.

Any place is upgrade from here.

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