As the Eurogroup meets today and tomorrow, a funny thing is happening to Spanish bonds; they are selling off. Today is the worst day for the no sacrasanct 2Y Spanish bond yields in over 5 weeks and 10Y yields are not pretty at all. The 'sync' between risk-on around the world as Bernanke's bubble was re-blown yesterday seems to have drawn all that fast money flooding back to the S&P 500 leaving the forelorn Spaniards to ponder whether a bailout wouldn't be so bad. Just for one second, consider this - why did Bernanke go full retard yesterday? Data didn't exactly scream 'panic' mode. Perhaps he knows something about this weekend in Europe and wanted to get out in front of it? Certainly, the shift in Spanish bonds is idiosyncratic and extreme given all the 'Draghi-support' it has. For now though, it seems fast money is playing high-beta US equities, not high-beta European debt - but for how long?
Spanish 2Y yields pop by almost 25bps - the most in over 5 weeks...
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as US equities diverge in extremis from risk-on exuberance in Europe...
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and while Spain's bonds are seeing a very troubling day (really the worst day in weeks), IBEX is up over 3.5%!!!!
Charts: Bloomberg