In praise of debt mutualisation
Steven Major, fixed income strategist at HSBC, has a remarkably sunny note out on the prospect of unlimited bond market intervention by the ECB, driving short term sovereign yields significantly lower....
View ArticleWhen ECB bond-buying meets collateral
Click to enlarge. A word of caution in advance: the optimal structure is deeply complex, which itself should raise concern in the minds of investors…Continue reading: When ECB bond-buying meets collateral
View ArticleEurozone PMIs: from still bad to worse
Let’s start on a positive note on the volley of Markit PMI released Monday. Spain’s PMI rose during August to 44, versus 42.3 in July…Continue reading: Eurozone PMIs: from still bad to worse
View ArticleSeniority, the SMP, and the OMT
“Was today the day that the Portuguese PSI began?,” Macro Man asks, of the OMT. They’re noting something curious about ECB seniority in light of Thursday’s revelations about the OMT. The ‘technical...
View ArticleVolatility and the OMT
How much longer does this go on? Spanish 2-year bond yields at 2.9 per cent – down from 6.6 per cent when we first said there was something to what Draghi was saying about convertibility risk. The...
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And from confusion sprang ugliness… it was ever thus
That’s the FTSE 100 down 1.2 per cent: Continue reading: And from confusion sprang ugliness… it was ever thus
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Spanish bonds are feeling positively Moody
That’s Spain’s 10yr spread over German Bunds dropping below 400 points for the first time since the start of April: Spanish 10yr fell to 5.547 with Bunds touching 1.5864. Probably something to do with...
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This eurozone PMI record appears to be broken
Another day, and another confirmation that the eurozone economy is struggling to gain traction. And it’s not just the small peripheral economies that are seeing factory activity slowing. From Reuters:...
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Arrivederci, Monti
Mario Monti, the saviour of Club Med, is walking and Italian bond yields are waving him off. Here are the 10-year and 30-year BTPs, with dramatic spikes: Continue reading: Arrivederci, Monti
View ArticleTom, Dick and Harry in Rome
A riddle, wrapped in a mystery, inside an enigma, inside a pari passu clause. Here are some terms from Italy’s 2015 US dollar bond, which it issued under New York law in 2010. It is a pari passu...
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Pricing the Berlusconi bias
On a generally crappy day for equities and bonds across all the big western markets, Italian stocks stood out: Continue reading: Pricing the Berlusconi bias
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Monte: oops
World’s oldest bank puts out a late-night statement confirming “the presence of errors” in three structured transactions. Click for the full release… (it’s in Italian) Continue reading: Monte: oops
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Stable Italy shocker hopes dashed!
No sooner had Italian stocks soared and bonds tightened (sic) on early exit polls suggesting Pier Luigi Bersani’s centre-left Democratic party might have secured victory in both the lower and upper...
View ArticleItalian post-election misery
In terms of providing certainty, it’s hard to see how the Italian election outcome could have been worse. From the FT:Continue reading: Italian post-election misery
View ArticleThe burning of Rome spreads
The political picture in Italy is looking deeply uncertain. We all know that. But what’s possibly more interesting is the scale of the market reaction to that uncertainty.Continue reading: The burning...
View ArticleBeppe Grillo at market’s close
Some thoughts from Beppe Grillo (really): I’m here on the settee at home. They’ve made me lie down. They don’t want me to have any upsets. They’ve covered me up with one of those checkered rugs....
View ArticleLa brutta figura
Italy has finally fallen out of the ‘A’ ratings and into the Bs, at Fitch Ratings. Here’s the explanation for cutting it to BBB+, outlook negative:Continue reading: La brutta figura
View ArticleWhen stress and spreads part company
William Porter at Credit Suisse has been mulling the market’s muted reaction to the Italian elections. Increased stress is no longer finding its way into widening spreads, thanks to the Draghi “put”....
View ArticleWas that promise of ratable payment wrong? Should Italy not have done that?
File under: Argentina’s battle with its holdouts and the effects thereof on pari passu clauses in sovereign bond contracts elsewhere in the world — with a special crossover to the changing legal status...
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