Spanish stocks rebounded Thursday while the pressure on the country's government bonds eased, as investors reacted positively to the government's confirmation that it will nationalize the country's fourth largest bank.
MADRID (AP) -- Spanish stocks rebounded Thursday while the pressure on the country's government bonds eased, as investors reacted positively to the government's confirmation that it will nationalize the country's fourth largest bank....
And it all started off so promisingly, when after the biggest selloff in US stocks in two months, the BOJ and its preferred banks once again sold 6J (i.e., bought USDJPY) in the morning Japan session (while collecting CME liquidity rebates of course), sending the pair from below 108 to half the way to 109, and naturally taking global futures higher while pushing yields lower when as ITC says a "large TY seller knocked USTs to lows during the session" - hmmm, wonder who the large seller was. And then...
Portugal suffered the most - with its bond spreads now a huge 45bps wider on the week. It seems between the ever-increasing vol in Japan, a rapidly fading JPY carry funding mechanism, and lack of fresh meat from Draghi, Italian and Spanish bonds and stocks are losing their 'greater fool' bid. Sovereigns are seeing their worst day since February; stocks among their worst days since Feb - with several Spanish and Italian banks halted limit-down (as ECB's QE-like collateralization was not eased); and EUR is strengthening against the USD as risk-flows are repatriated.
The selloff on Spanish and Italian bonds continued today with yields in Spain hitting euro-era record highs.
On the deficit side of matters, I do not believe Spain will meet its budget-deficit targets, and neither does Fitch.
Fitch Managing Director Ed Parker said Spanish Prime Minister Mariano Rajoy will miss budget-deficit targets this year “by a substantial margin.” according to a Bloomberg report.
CDS rates to protect against default by Spain rose to an all-time high today as Investors brace for more pain in Spain.
Spain was firmly back in the spotlight on Friday, after news of a sharp rise in borrowing by the region’s banks from the European Central Bank triggered losses across European stocks, but especially for the IBEX 35 index XX:IBEX -3.58% , which fell more than 3% to a three-year low.
The euro and European stocks rallied strongly on Wednesday and pressure on Spain eased, but the eurozone debt crisis weighed heavily with a credit watch for Portugal and Germany struggling to sell bonds.Leading EU figures warned that financial markets were underestimating the will of EU leaders and institutions to defend the euro and the eurozone.But in a new sign of the extent of anxiety among investors, a German bond issue was undersubscribed.