We warned on Thursday and Friday of last week that the rally in European risk assets had begun to disperse (with stocks continuing to the final bell on Friday while credit markets were far less excited). Today saw stocks roll over modestly (less than 1% drops in general today) and credit markets continue to slide. Sovereigns leaked modestly wider once again (except for Portugal which weakened considerably - given a good chunk of last week's gains back in its illiquid way). EURUSD is practically unchanged from Friday with cable (GBPUSD) the most active as Carney is named the new BoE head. German 2Y remains at 0%, Swiss 2Y drifts lower (more negative), 3-month EUR-USD basis swaps dropped their most in 2 weeks, LTRO-encumbered bank spreads continue to underperform, and Europe's VIX jumped its most in 3 weeks.
European stocks (blue) playing some catch down to credit...
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GBP dominated FX vol this morning so far with EURUSD practically unchanged...
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Charts: Bloomberg