European sovereign bond spreads are notably wider on the day as anxiety over Berlusconi buggering-up Italian politics' status quo once again sent investors scurrying from risk-assets early on in the European day. Italian stocks were down 2% (and the rest of themarket down around 1%) before McCain's confirmation of a 'no-vote on narrow scope' seemed to trigger bigger-deficit-spending exuberance in stocks in the US and Europe. The USD was sold (Taper-off) and Treasuries bid which sent EUR higher and AUD surging (AUD's best 3-day run in 21 months!!). European stocks turned back higher in a ridiclously correlated manner to US equities leavingh only Italy red by the end of the day.
FX markets dumped USD after McCain's comments...
[4]
and while European Stocks popped, European bond spreads did not seem so exuberant...
[5]
Charts: Bloomberg