Awful unemployment, dismal German retail sales, huge uncertainty over the Greek buy back plan. Have no fear, "buy stocks and you're good to go" seemed to be the message this week in Europe. However, as the afternoon went on in Europe, so equities gave back their day's gains and started to catch down to the far less exuberant credit markets. European sovereign credit rallied into the close leaving Spain and Italy -25bps on the week. The European week was dominated the massive squeeze in the US driving a wedge overnight from Wednesday's close to Thursday's open in Europe - the squeeze seems to be done for now as we are fading back today. EURUSD pushed higher on the week by a mere 25pips to close its week in Europe above 1.30. Europe's VIX stabilized today at 16.5% (after falling 1.25 vols on the week). Bottom Line - Europe closed weak and equities feel very lonely up here.
All the week's European Stock gains came from the overnight gap from Wednesday to Thursday...
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European stocks (blue) turned around today to close red and start to catch down to credit's lack of ethusiasm...
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European Sovereigns faded back after Thursday's gap-down squeeze...
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EURUSD clung to 1.30 and ended the week very marginally higher...
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Charts: Bloomberg