Market Snapshot: EUR Strong But Everything Else Weak As Europe Closes

Tyler Durden's picture

A turbulent session in Europe ended on an ugly note as broad equity markets closed near their lows, credit spreads near their wides, and financials gave up all their rumor-driven gains. EURUSD, however, managed a spikey end to the day, popping its head back above 1.37 after trending generally weaker all day.

French banks seemed to be as good a proxy for the general sentiment in Europe as they rallied on rumors of mergers and recapitalizations only to see that strength sold into - remember, the short-sale ban remains in place so this was reducing exposure not outright shorting (eh hem).

Senior financials extending their widening from earlier in the day to get back to almost unchanged - around a 10bps decompression off intraday tights.

But the EUR continues to strengthen, now into the green for the day against the USD, as perhaps hope that Bernanke print-print-prints is priced in? Is this EUR being repatriated or simply a reflection of the end-game for the USD?

But Gold is unimpressed (UPDATE: Gold just broke back above $1800 lending some credibility to this move in EUR being a systemically weak-USD play) though oil has managed a decent rally this morning so far. Copper remains lower and silver follows its new friend oil higher.

US equities broke overnight lows and are trading at support from Monday/early-Tuesday but EUR strength (USD weakness) is providing some energy for a rally - even as TSY yields plummet. 10Y and 30Y down 14-15bps on the week now, 5Y -9bps and 2Y -1bps as 2s10s30s surges lower (it seems expectations of Twist are being set into the long-end overall with no consideration for the 10s30s curve or 2s10s needing some adjustment for bank carry trades - perhaps explains why Financials are underperforming in the US today so far).


Stocks look modestly expensive relative to CONTEXT and credit today as this minor rally off the lows continues and we note HY bonds seeing net-selling (relatively unusual recently but perhaps firms feel comfortable with their macro hedges and are unwinding cash now).

All-in-all, seems rather odd price action (but that is nothing new) as EUR rips, TSYs rip, and stocks are down while gold limps along - can 215ET come soon enough? Feels like correlations are breaking down today.

Charts: Bloomberg

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
GeneMarchbanks's picture

Either BNP goes or the Euro choose wisely. Later on, it all goes.

prains's picture

Either BNP goes or the Euro choose wisely.



MillionDollarBonus_'s picture

Just a waiting game now. I'm heavily overweight equities and equity futures; positioned adequately for Bernanke's big day.

jdelano's picture

Lol.  Man, imagine if you really were that stupid?  Now that would be even funnier...

DeadFred's picture

Flat today with a modest rise until Friday, 1230 cap on the S&P. Then reality sets in and your mythical positions lose money. We'll see on Monday. Bernanke won't do more today than meet what's already priced in and the twist is not enough to compensate for Europe. MHO

IQ 145's picture

Long from 1190 on the S&P; not mythical; I think the Market has changed sentiment.

SheepDog-One's picture

Hell as long as the fiat currency is 'strong' in bankrupt Euroland, all is well lets go rock some cheeseburgers and Freedom Fries!

X.inf.capt's picture

man, these articles are coming out FAST...

jdelano's picture

this is an excerpt from an article on the finance page of the Telegraph.  The article has just been pulled down.  Freudian slip?

However, the forecasts were based on the assumption that President Barack Obama's $447bn jobs plan is approved and the eurozone crisis is resolved with no more than the small voluntary default on Greek debt already agreed. A worse outcome is a "distinct possibility", the IMF warned.

SheepDog-One's picture

Wow thats insane, 'Best case scenario and full repair for all us bankrupt countries is already priced in, but that could possibly go bad'...lmao this is quite a circus! 

jdelano's picture

yes--and also note how they reported the Greek default as a foregone conclusion....

RoRoTrader's picture

"there must be someway out of here", said the joker to the thief......

Bruce Sprinsteen - Neil Young ......All Along The Watchtower

BungaBunga's picture

I heard Bob tried Jimi Hendrix. Or was that Jim Morrison?

eurusdog's picture

Won't last, FOMC will not deliver. They will put the decision off until next meeting. Market has been relatively stable (as far as not crashing) and USD hasn't strengthened to much. No need to act right now.

RobotTrader's picture



Here's another "outlier" for today:

30-yr. yield now crashing to 3.18%, long bonds now at 142.

The Bernanke Fed will go down as the greatest financial engineer of all time.

Nobody, I mean nobody, has been able to "whip inflation", drive interest rates to world record lows, boost stocks 85% off 2009 lows, while running gargantuan deficit spending.

Economists and PhD's will be talking about this for the next 100 years.

What_Me_Worry's picture

Well, at least you got the last sentence right.

SheepDog-One's picture

Nobody I mean nobody is a bigger dork that you Momo!

Theta_Burn's picture

Accurate statement today give it 6 mths. and revisit this master of the universe call

Folks will be talking about it alright, and it won't be about the rosy outcome..

IQ 145's picture

Shorted them from 142, basis Dec. this morning; they got nowhere to go but down. I like nice simple stories.

disabledvet's picture

Corrleations are in place you mean. Dollar is the only exception as it shows strength "but for today." the last of the "sure thing" set have now had their balls but in the vice grips. At 215 The Bernank will order "squeeze" and come tomorrow you'll start hearing the grunts and groans.

JW n FL's picture



"back above 1.37 after trending generally weaker all day"

How much did that cost the U.S. Tax Payer?

Saving the Same Europe who would not fight for Light Sweet Crude?

Is America owned by Israel or France? I am confused?

or.. How many Owners has Washington sold themselves too?

I can see and off book synthetic sale of Votes.. if you are going to Vote one way. You might as well get everyone who wants you to Vote that way to pay you for something you are going to do any way, Right?

I hate that most people do get it.

Monedas's picture

The World is run by and for the benefit of your closest 600,000 million Socialist bureaucrat friends ! Monedas 2011 I'd rather be a snowflake in Heaven....than a lump of coal in Hell !

Monedas's picture

When I buy a Tetrapak liter of V8 juice for a buck at my beachfront Mexican Walmart, I give them a $20 dollar bill and they give me thirteen pesos to the dollar in change ! Beats the serape off the local money changers....Casa de Cambio ! They can't prop up the dollar forever ! Relief is on the way ! They've been planning this "September Stick Up" for a while ? Monedas 2011 Michael Moore is the love child of Madalyn Murray O'Hair and Barney Frank......the three most hated people in America !

mynhair's picture

Jonesin' to pick up TMV here at 18.13, but it might go to 17.  WTFK?

lolmao500's picture

Chairsatan should just finish off Europe and annouce QE3 so the euro gets stronger, crippling their exports.