SPAIN AND ITALY ARE GETTING WALLOPED, DOWN OVER 3%

So much for convincing investors that Europe is fixed.

The European Central Bank’s latest monetary policy decision—a 25 bps rate cut—hasn’t bolstered confidence, either.

UPDATE: Markets across Europe are tanking, with Spain taking the biggest hit. Italy is not far behind. A quick look at the scoreboard:

German DAX: -1.2%
French CAC 40: -1.6%
Italian FTSE MIB: -3.0%
Spanish IBEX 35: -3.5%

The IBEX 35 is just getting destroyed:

ibex 35

Photo: Yahoo Finance

Even more worrisome is the fact that borrowing costs are shooting higher for Spain and Italy. The Italian 10-year crossed the important benchmark of 6 per cent.

But the rise in yields is particularly important for bonds with maturities of less than three years, or before the expiration of the two game-changing LTROs from the ECB.

We’ve been following the Spanish two-year as a good indicator of this stress—our “Most Important Chart In Europe”—and it’s up 53 basis points today to 4.61 per cent:

Photo: Bloomberg

Background…ECB CUTS RATES BY 25 BPS TO 0.75% >

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