European stocks fell for the first week in the last four with financials leading the way (though only down 1% on the week). There was considerable dispersion among the individual nations though with Greece up 4.75% (of course, why not, as Merkel's victory sunk in), Italy down 1.3% and Spain up 0.77%. But in bond land the picture was very different with Spanish and Italian bond risk surging. Italy's 29bps spike pushes the spread to 2 month highs and Spanish risk jumped 23bps on the week. Europe's VIX ended unchanged but saw some of the strangest trading we have ever seen.
Italian bond risk at 2 month highs and its worst week in 6 months...
[5]
as Financials followed the US route and gave up all post un-taper gains...
[6]
and Europe's VIX was a twitchy mess...
[7]
Charts: Bloomberg