It appears Draghi's gonna need a bigger bazooka... The last 2 days have seen the biggest drop in 5 months for the German stock market. DAX is now back at 7-week lows as EUR strengthens above 1.11 (up a stunning 6 handles since Draghi said it was "pointless" to short EUR [5]) as the YoY rise in European lending [6] has prompted fears of an early taper (and The Fed looks set to be on hold for longer) and fast money has moved on to China amid Grexit fears. Peripheral bond spreads are weak again - especially Portugal.
German stocks battered...
[7]
As EUR strengthens amid no more promises from Draghi (as The Fed looks to be on hold for longer)...
[8]
From April 11th -
Expressing confidence in the euro’s continued stability, Mr Draghi said on Saturday it was “pointless” to go short on the single currency — challenging anyone who disagreed to do it.
So far no good. And as a gentle reminder... the biggest consensus trade in the world is... [9] the Euro short. So yes, "max pain" is coming fast...
[10]
Charts: Bloomberg
