Great note out this evening from Citi’s Steven Englander, who takes the pulse of the market and sees that buoyancy and risk-on-ness are coming back.
The market has rallied. European credit default swap swpreads have tightened. Risk currencies are up.
But he identifies 5 warning signs that are staring the market in the face, and could derail any nascent confidence/momentum.
- Finland and the Netherlands stymieing the bailout.
- The list of countries looking help on containing borrowing costs growing.
- Christine Lagarde saying she’s “not in a negotiation or renegotiation mood at all,” with respet to Greece.
- The ECB might drop the ball.
- A gap is growing between the data (which is bad) and markets (which are holding up).