EuroStoxx (Europe's Dow) closed today -1% for 2013. France, Germany, and Spain are all lower on the year now. Italy, following ENI's CEO fraud, collapsed almost 3% from the US day-session open, leaving it up less than 1% for the year. Just as we argued, credit markets have been warning that all is not well and today's afternoon free-fall begins the catch-down. European sovereign bonds are no better with Belgian spreads the worst +13bps on the year. Italian bond yields are the highest in seven weeks (with spreads back above 300bps again today) as both Italy and Spain approach unchanged for the year. Europe's VIX closed at its highest in almost 3 months (aside from the 12/28 spike) as Swiss 2Y rates edge ever closer to negative once again (and 3-month EUR-USD basis swaps dropped the most in seven months). EURUSD broke back below 1.3400, its lowest in 10 days. Cue 'Cleanest Dirty Shirt' talk from US managers in 3...2...1...
EURUSD at 10-day lows...
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European stocks broadly negative YTD...
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with Italy collapsing almost 9% in the last week...
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and European Sovereigns now at the year's worst levels...
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as Europe's VIX blows to 3 month highs...
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and remember basis-swaps? Well, they are back, having plunged the most in seven months in the last week following LTRO repayment...
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Charts: Bloomberg