Grexit Contagion Uncontained: Peripheral Bond Risk Surges As Greek Banks Collapse

Despite weeks of reassurances and repetitions that Grexit is "contained" - it's not! Bond spreads for Portugal, Italy, and Spain are blowing out (now up 35-50bps in the last 2 days). While Draghi desperatly soaks up selling pressure, Spanish bond yields have surpassed US yields for the first time since October. But while bonds are turmoiling (Bunds/TSYS -5-7bps, everything else ugly), the real carnage is in Greece. Greek bank bonds are pushing to new record lows and the broad ASE is down over 13% from last week's exuberant surge when Greece was fixed again (based on a Reuters headline rumor).

 

Grexit contagion is spreading across Europe...

 

For context - this is the biggest 2-day rise in bond risk since May 2010!!

 

Greek Bank Bonds are collapsing...

 

and broad Greek stocks are crashing...

 

Remember that 7% surge day last week when everything was fixed?

 

Charts: Bloomberg