UPDATE: 5Y now +126bps (biggest jump in 19 months - snce the record highs) and rest of Europe is catching their systemic risk flu
Bond Spreads...
[4]
Stocks red in the periphery now...
[5]
Amid all the fun and games of the last few days that have seen everyone buy everything everywhere, we noted that the President of Portugal has 'warned' his politicians [6] that if they don't find a coalition solution in a "very short period" then he will call early elections (throwing the Troika-imposed austerity program into shambles). It seems the 'time-bomb' was on a long fuse - thanks to Bernanke - and the reaction is very evident today as Portuguese bonds implode. Spreads are 76bps wider on the day, breaking above 600bps for the first time in 8 months. The 5Y yield on Portuguese debt is now at 7.5% (up 109bps today!) - and yet still they discuss the expectation of coming to market soon for new issuance. Europe remains very un-fixed and every now and again, when the domestic buyers are overwhelmed by some real liquidity, we get a glimpse.
[7]