Fresh Concerns About Spanish Growth And Greece Stunt Yesterday’s Epic European Rally


European markets are mostly in the red after early trading, led by losses in the periphery. 

The Italian FTSE MIB is already down over 1% in an hour and a half, while the DAX struggles to climb into the green.

U.S. futures are slightly positive.

The only unambiguously bullish equities news here is comes from Athens, where investors are continuing their “dash for trash.” The Athens Stock Exchange is up over 1.5%.

Big news this morning is that Spain’s unemployment has reached a record 22.85% from 21.5%, far worse than expectations that the rate would only grow by 0.3%. The IBEX 35 is off -0.20%.

Negotiations on the terms of a private sector bond swap deal, which would allow Greece to restructure about half of its debt, drag on in Athens. Universal “voluntary” approval for the debt deal by Greece’s creditors–the only way the country will avoid provoking a credit event–still looks impossible without some significant bending of the rules by European leaders.

UPDATE (6:00 AM): The sell-off appears to have moderated somewhat. The Italian FTSE MIB is still in the negative, but down a more modest 0.73%. However, the DAX has recovered to +0.34%.

None of this is particularly bullish, but it’s not necessarily bearish either.