Boring, eh?
Speaking matter of factly here, this is a most horrendous tape to be trading. It’s not safe out there anymore — don’t let anyone fool you into believing you can trade like some sort of disheveled idiot without consequence. We live in a society of vandals who disseminate fake news for bad reasons; it can never come as a surprise when our investments fall astray due to some political event that materializes out of nowhere.
Today’s panic du jour is the collapse of the EU again, because Spain and Italy might want it that way. Why would both Spain and Italy want to stop feeding off the tit of Mother Germany? Who knows? Perhaps nationalism is back because people feel like shit, subjugated by a borderless wraith headquartered in Brussels. Whatever the reason may be, we know nothing will come of this — just like BREXIT and GREXIT before that, Trump, and everything else that’ll come later. The status quo cannot be defeated.
Over the weekend, Italy’s prime minister appointed former International Monetary Fund official Carlo Cottarelli as interim prime minister to form a new government and restore political order within the country.
The euro zone’s third-largest economy has been struggling to establish a government since inconclusive elections in March, with anti-establishment forces abandoning their effort to form a ruling coalition over the weekend.
The latest developments have spurred previously dormant fears concerning the stability of the eurozone and default risk concerning Italy’s €2.3 trillion ($2.68 trillion). The 10-year Italian bond yield jumped above 3.06 percent on Tuesday, more than 2.5 percentage points above the German 10-year bond rate. Yields move inversely to prices.
WTI is down 1%, but Brent is +1%. This is great for refiners, since they purchase in WTI and sell in Brent. The main beneficiary from this widening is HFC.
The dollar is +0.5% v the euro — standard risk off nonsense. And, lastly, Spanish, Portuguese, and Italian bonds are blowing out vs German. I suppose now is a good time to start referencing levels for the sake of keeping track.
The Spanish 10yr is 1.59%, Portuguese 10yr 2.23%, and Italian 10yr is 3.05%.
Dow futs are -160, Italy, Spain and Portuguese markets are off by ~2.5%.
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Was there ever an actual EU crisis, or merely an allusion of a crisis? If the allusion is enough to take coin away from the plebs, why have a real crisis?
Tuesday riddles…