With German Consumer Price inflation coming a little hot, Wholesale Price index deflating MoM (and less than expected YoY), and Finnish Industrial Production turning negative unexpectedly, (and now French Industrial Production and manufacturing dropping significantly), sellers returned in the early European day with EURUSD breaking below 1.35 (for the first time since 10/10) and ES -7pts from the close (and 12pts from overnight highs) at overnight lows. As everyone anxiously awaits the open of BTPs, credit markets are already playing catch up to the US afternoon with Main 5bps wider and XOver 23bps wider.
Copper is the disaster du nuit (for now) as it is now -6.5% from Friday's close. As the dollar strengthens the rest of the commodity complex is falling fast and TSY yields are dropping rapidly also. The broad risk market is catching up to equity's weakness from the late US session which will tend to mean a notable drop in 2s10s30s and Oil as FX crosses drift weaker. Oil remains positive for now on the week as Gold is practically unch.
UPDATE 1: Italian Bond Futures opened -1.7%
UPDATE 2: Credit cracking hard now XOver +35bps, Main +8bps, SENFIN +13bps
UPDATE 3: BTPs opened +16bps at 569bps over Bunds
UPDATE 4: OATs trading over 150bps wider than Bunds for first time ever