As gold recovered overnight and JPY weakness sparked hope for risk-assets once again, European stocks opened down and rallied for much of the European day. However, just as with yesterday, once the US opened, European stocks decided enough was enough and rolled over quite significantly (led by the banks). Safety was well bid in general in Europe with 2Y Swiss rates dropping further to 3-month lows at -10bps at their lowest! It appears the appeal of European sovereign debt has worn off for a moment among the BoJ as Spanish and Italian bond spreads leaked back wider on the day. EUR strength (and JPY weakness) provided the impetus for US equities to levitate but it appears more like EUR repatriation given Europe's risk-aversion today.
2Y Swiss rates have dropped for 6 days in a row as safety demand has re-emerged significantly...
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European Stocks appear to find the US Equity market open a terrifyingly risk-off thing... led by the banks
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Charts: Bloomberg