European financial stocks had their best week of the year - jumping an impressive 6.2% on the week and over 10% in the last two - as once again 'Europe is fixed' (except credit markets don't seem as enthused). At the same time as this exuberance is taking place, Germany's DAX and Switzerland's SMI saw almost their worst weeks of the year (down 1% and 1.7% respectively). The week was very oddly dispersed with Spain, Portugal, and Greece (up 5%, 4%, and 3%) having an incredible rip while the broad-based Bloomberg Europe 500 (Europe's S&P) dropping 0.25%. Bond markets were just as enthused with Portugal, Spain, and Italy continuing their un-Taper rallies (spreads down 49bps, 20bps, and 15bps respectively). All of this as the EUR strengthened, composite PMI peeked over the 50 mark, French unemployment hit a record high and Italian bad loans surged to a new record. Schrodinger has moved from China to Europe it would seem...
Credit ain't buying it...
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and today saw the exuberance stall a little in stocks and bonds...
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