Mr. Market needs to be feed and he has not gotten anything tasty from the EU or IMF for weeks….
Lately it has been all bad news, with the Spanish banking crisis intensifying, intramural battles withing the ECB raging and Germany losing its preeminent position as the undisputed first among equals in the euro zone.
All of that is reflected in the renewed nervousness among investors, who are demanding higher yields to buy government debt (despite the ECB’s steady purchases).
Spanish spreads over the German benchmark are within 20 bp of their highest levels despite a trillion pledge to sure up the euro zone and billions in ECB bond buying…
Not a good sign for the euro. Shock and awe, it ain’t.
