Everything Is Going Wrong In Europe Today

hell inferno

Photo: from The Garden of Earthly Delights by Hieronymus Bosch (1490)

Europe can’t seem to catch a break today.Just take a look at all the latest headlines:

  • German industrial production data proved a major disappointment, falling 1.3 per cent month-over-month, versus an expected 0.5 per cent. Germany is a major exporter to the rest of Europe, and this is the latest sign that contractions in the periphery are starting to affect the European core.
  • Yields on Spanish bonds are at their highest levels since December, before the European Central Bank’s first three-year long-term refinancing operation. Yields on the 10-year stand at 5.83 per cent after rising more than 13 bps so far today. The spread between Spanish bonds and German bunds topped 400 bps for the first time since December.
  • The euro broke the floor the Swiss National Bank had imposed on the EUR/CHF exchange rate, falling below 1.2000.
  • French borrowing costs rose slightly in a bond auction this morning, with yields on the 10-year up to 2.98 per cent from 2.91 per cent in March. Those yields are up four bps in the secondary markets just under 3.00 per cent.
  • Stocks are in the red everywhere. The DAX is off 1.08 per cent, the FTSE MIB has fallen 1.49 per cent, and the IBEX 35 is down 1.20 per cent.

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