Supposed progress on the Greek buyback (which as we noted earlier [4] has merely served to line the pockets of the short-term traders) and misunderstandings over Spanish bailout requests (amid mixed PMIs) was enough to drive European stocks up and sovereign bond spreads down as the morning progressed. EURUSD strengthened. Then around 8ET things changed (as the bailout request was realized for what it was): European stocks reverted lower in a hurry (catching down to a less robust credit market), Sovereign bond spreads bled notably wider off the day's tights, and gold fell notably. EURUSD seemed to manage a completely uncorrelated levitation (repatriation?) even as broad risk assets fell into the European close - ending at their lows. A weak close to a hope-full day.
The 8amET regime shift as hope that Spain is FUBAR failed... (this crazy market)...
Sovereigns...
[5]
Stocks...
[6]
catching down to credit...
[7]
but EURUSD rallied back to regain it all as we closed in Europe...
[8]
more repatriation?
Charts: Bloomberg
Bonus Chart: GGBs ramped by their most since PSI - but faded for most of the day (profit-taking courtesy of the troika)...
[9]