Market Snapshot as Europe Implodes

Tyler Durden's picture

Despite some better-than-expected macro data overnight (admittedly marginal), investors continue to retreat from any European exposure as sovereign stress leads to financial stress and drags non-financials into an austerity-driven slowdown. The snaps wider in credit markets are very reminiscent of crises past when being hedged at any cost was more important than any short-term trade opportunity.

It appears we are entering an endgame of sorts and with the vitriol from Merkel (isn't considering possibility of Euro Breakup), Draghi (don't 'expect' bond purchases forever), Schaeuble (Tobin Tax is warranted, aid is conditional, and Euro 'joint liability' won't fix crisis) growing louder and more strained and where decisions are being forced on a broad swathe of desperate politicians and bankers by a market-driven maelstrom.

Both equity and credit markets are bearing the brunt but credit seems the most aggressively beaten down (beta adjusted):

Main +12 to 177bps

XOver +44 to 738bps (handily wider than a closed HY now for over a week)

SovX +13 to 322bps

SENFIN +20 to 266bps

SUBFIN +33 to 476bps

Main Ex-FINLs +10 to 155bps

Germany +5 to 83.5bps

France +14 to 184bps

PIIGS (average) +18 to 1002bps

 

GDP-weighted European sovereign risk is breaking to new wides at 260bps (as Greek 10Y spreads among others make new Euro-era wides):

 

As we have noted in the past, short-sale bans don't work - French and Spanish banks on the list are now notably negative:

 

European equity indices are a sea of red:

And ES is hurting overnight (retracing more than 50% of the recent swing low-to-high):

Chart gallery courtesy of Bloomberg