Peripherals Plunge As Swiss/German Safety Sought Once Again

For the tenth day in a row, Portugal's bond spreads widened - now the biggest two-week move since January as its absolute spread is back well above 700bps once again. Spain and Italy have been leaking wider consistently in the last few weeks (+15-25bps from the tights on Friday) and Spanish and Italian equity markets are tumbling back off their post-Draghi euhporia highs (down 2% from Friday's highs alone). Critically, safe-havens are seeing heavy flow; Germany 2Y is back below zero for the first time in two months and Swiss 2Y is below -20bps again. EURUSD is reverting back down to its swap-spread-model implied fair-value as 'hope' fades of OMT's ability to do anything 'real'. Europe's VIX jumped its most in over two weeks to 22.2%.


European stocks are lagging...


European peripherals not having a fun two weeks...Spain/Italy 44bps wider! Portugal +123bps


and Greek bonds have given back 180bps of their yield compression in the last 10 days... a 15% price drop in 10 days!


German and Swiss 2Y rates are at 2-month lows...Germany negative once again!


Portugal is struggling hard...


as the EURUSD reverts down to its swap-spread-implied fair-value...


Charts: Bloomberg


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