This page has been archived and commenting is disabled.
Spanish Bonds Slump To 17 Year Lows Amid Choppy Week
Aside from Spain (-0.3%) and Greece (-11.8%), European equity markets are ending the week green - albeit marginally - as we can only assume the hopes and prayers of every banker are being discounted into the price of corporate liabilities (an 'event' will happen but don't worry as the ECB/Germany will cave). Corporate and financial credit markets also ended the week tighter - with financials the high beta players on the week, hugely outperforming on Tuesday but fading into today's close. Today was not a pretty end to the week in credit though as both sovereigns, corporates, financials, all peaked early in the day and pushed to near their lows by the close. Senior financial bond spreads actually closed wider on the day - at their wides - and Spanish sovereign bond spreads exploded over 35bps wider from earlier tights to end at theu widest since April 1995. Italian bond spreads also jumped 32bps wider from their morning tights but end the week -9bps and France gave back almost half its sovereign bond gains of the week today. EURUSD remains the story, breaking below 1.2500 for the first time since early July 2010 as it seems the FX markets remain much less sanguine of the endgame here than do equity markets (with sovereign credit getting closer to FX's world view and corporate credit closer to equities but fading today). Europe's VIX remains above 30% (though our VIX-V2X compression trade is performing well as US VIX elevates).
Athens Stock Exchange Index this week...-11.78%
Credit markets - particularly financials (red below) - were weak today, giving back over half of the week's gains. Equities rallied into the close (blue) against the performance of every other asset class...
but today was dismal for European sovereign spreads...
leaving Spanish bond spreads at 17 year wides...
and while we hear plenty of chatter on VIX, Europe's VIX equivalent remains above 30% - even after having a great week - though we note - the VIX-V2X compression trade we recommended is performing very well...
Charts: Bloomberg
»
- 5860 reads
- Printer-friendly version
- Send to friend
- advertisements -
Tyler,
Could you please dump the sidebar ad on the right - the one with the woman showing her scar from her lung operation..??
Almost as bad as the Glenn Beck ads you had up here last year.
Thanks........!!
Leave it, I'm hot for women with scars
Don't the Spanish have girl bands like Japan does?
FYI: Ads are served by Google which are determined by your surfing habits.
I'd recommend staying away from certain types of sites if you want nicer ads.
The reason why spreads have not blown out to greek like proportions is because there is still some faith in the spanish sovereign.
I dont understand why anyone would own a peripheral bond? Is the hopium that strong?
Serious question. Why is there any private institutional ownership or retail ownership of any spanish bond?
I think peripheral spreads are likely to narrow. Europe just needs to get a disposition on Greece and the ECB needs to be uber loose with policy as Bernanke was with QE2. In the US it cause a flight to risk / junk bonds. Should work the same magic in Europe. I like the long peripheral bond / short euro trade that Tyler recommended. Maybe also long peripherals, short bunds.
Germany may not give on many issues, but they will have to give on monetary policy. It makes a lot of things just "go away".
Stay clear of long-term treasuries. I sold mine today.
Short euro / long gold.
Short bunds / long peripherals.
Stay on the sidelines with USTs. Short on a panic spike.
For the same reason that Adrenaline junkies like to base jump...
But, but, but . . . . CNBC and Pisani said "everything is fine" and too much fear is already priced in.
Pisani is an ass clown, but he is nowhere near annoying as Jim "BOOOYAHHH" Cramer
Remember now, you're going to have to stay in character if you want to succeed!
The dow is in a total sine wave pattern this morning is the bernake about to speak or something??
What time is the PPT supposed to show up for work today?
It's giving me the creeps - usually a precursor to bad shit going down
NatGas is a dumping.
So what you are saying is....everything is FIXED!!!!
buy buy buy
Was Germany able to sell all their paper at 0% this week? I missed the final tally.
I repeat.
Reporting data like this emphasizing Spreads and Tights is not relevant to macro economic thinking that dictates everything right now.
The Spanish Finance Ministry doesn't give a shit what their spread is. They Focus Strictly On The %. Not what it is relative to Germany. The raw %.
It is the % that determines what they have to pay on their issuance. Not "spreads".
Can these articles please start providing the numbers that overtly and directly actually matter?
I see it as trading information, for what its worth.
The spread shows the risk perception
A spanish bond at 8 percent yield tells us no information without a reference to a low risk alternative.
A temperature of 108 gives me no information unless i know the standard it is measured with. Centigrade or farenheit
Your points are valid but it is Old Normal thinking.
There is no market now. There is no trading. All one can do is front run governments and THEY care only about their cost of issuance.
Raw % is what should be directly provided.
There are also no meaningful units of measure, which is why they aren't worth using.
Find the Reference point(s)...
The people buying these bonds are word searchers...looking for that liitle phrase that will protect them in the crash...they are not buying for the coupon rate..lol....its a game the system trade..and not a good way to fund your country.....
Ah it was a 'choppy' week yes I see.
Athens has a stock exchange? For what purpose?
from tyler: (an 'event' will happen but don't worry as the ECB/Germany will cave).
frauM will cave or the whole freaking cBankster ponzi collapses, imo, certainly around the EUR
as americans we know what it is like to cave; we had to do something and we continued to follow our styooopid fuking leaders into mega-maga-debt, and the NW0 can-kicking olympics commenced; but at least they were truly against it before they fell for it! the first vote was for the nation; the do-over was due to the stimuli given by the ubers to their dependents in political power, to which the "elected" responded appropriately: to increase and accelerate the transfer of wealth to the ubers for the greater good
with debt = money, the cBanks & their Financials simply have too much fuking p-o-w-e-r, where power = the ability to get somebody else to do your bidding or do as you wish
like innocently watch TV and talk among themselves about what IT says to talk about?
but the USA went down to these fuktards 4 years ago; now, hindsight indicates we blew it; this won't work; these clowns don't know anything but bullshit; they can't really fix or solve anything; they only way to fix or solve anything is to protect oneself by withdrawing from the crime scene, and try to weaken the power various institutions hold for the ubers
many americans knew this in '08, and spoke the truth; but power likes lies...
many germans know this, today, many in the EU; but just listen to the power!
tyler is correct re an 'event'; and he is correct that the ECB will cave; and he is probably correct about germany b/c angela et al have been slowly led up into the box canyon, and now, they are trapped; as usual, past & present propaganda is determining the future
the germans have been around this bullshit before; but they, like us, are demographically sheeple, too, and the cultural controls on education, specialization, and thought are enormous
but this is simply: in or out, germany? and the latter is the best choice for everyone except the ubers, imo
the propagandist will never say "bank run" or "in or out?" either
in or out, germany? is NOT propaganda;
consensus may BE propaganda; this con will make it seem so ridiculous to NOT cave and to keep trying for a better EU
but germany can and should leave the EU here, primarily b/c they've been too dumbed down by bullshit to do it, already
but the german banksters are cartel; and they are gonna shear these fool german sheep, too
aren't they?
well, yes, unless germany says "out" (and exercises ITS power) germany is kaput
but germans would gladly sacrifice their economic might to keep the cabal in the fiat business; what could possibly be a better decision than "in"? why! there isn't one!
Spanish sovs in trouble (again), banks stocks falling like a paralyzed crow, etc. And housing continues to struggle.
http://confoundedinterest.wordpress.com/2012/05/25/spanish-banks-bankia-banco-popular-bankinter-cut-to-junk-housing-blues-continues-to-inflict-damage-on-spain/
Have a lot of womens love to buy coach bags in the United States, often can see all kinds of bag home is a lot of buy, but often find buy back utilization rate is not high, for always feel some situations is not suitable for supplement, so how to according to its own characteristics, match their own personality Coach Madison handbags? Impulse buy is the common fault of the woman, I believe that everyone has bag of need not, open a joke, if your bag enough, let you can't buy a lot of home, can only buy one, you wouldn't ask the question. To open a joke, if your handbags enough, as is anything you wear can find out the match Cheap Coach Handbags, also don't have this problem.