Following a handsome bounce driven by Draghi, Carney, and various Fed officials promising moar, peripheral European bonds and stocks are having a bad day (and week). Greece, Portugal, Spain, and Italy are all ending the week lower (after solid performance mid-week) with Germany's DAX seeing the benefits of a rotation from high-beta momo with a 5.1% rise on the week (the best week in 20 months!). Safe-haven flows dominated in bonds; Bunds rallied slightly more than Treasuries on the week but once again Peripheral nations collapsed. Spanish bond spreads jumped the most in a year. Italy was notably weak, but Portugal has seen spreads jump 28% in the last 2 weeks (the worst in over 3 years!). EURUSD had its best week in 5 weeks - and despite the peripheral collapse, Europe's VIX had its best (drop) week in 4 months ending at 19%.
A huge divergence in Europe this week... (seems evident that Spain, Portugal, and Italy are being traded as one entity...)
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but bonds were the big news... (in percentage terms, Portugal's move was the owrst in 37 months)
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Meanwhile, in Greece, the stock-market has dropped 7 of the 8 weeks and is dramatically underperforming the supposed reality that the bond market represents...
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Charts: Bloomberg