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’And over in Belgium …
The bond market’s (Belgian) beer goggles have firmly come off.
10-year Belgium bond spreads over German bund equivalents have risen to circa 90 basis points, or about 40 per cent more than at the start of this month.
Beware Luxembourg (it’s contagious)
Let’s be honest — we can’t really explain most of this (HT @pkedrosky), emphasis ours:
We model the spreading of a crisis by constructing a global economic network and applying the Susceptible-Infected-Recovered (SIR) epidemic model with a variable probability of infection.
CDS report: dismal downgrades
Markit iTraxx Europe 128bp (+1.5bp), Markit iTraxx Crossover 570.5bp (-6.5)
Markit iTraxx SovX Western Europe 145bp (+4.5)
Markit iTraxx Senior Financials 168bp (+1)
Greece 795bp (+45),
CDS report: The Achilles heel
The credit markets appear to be in the midst of a correction, with the major indices all testing recent wide levels. The Markit iTraxx Europe index widened 6.5bp to 142bp today, and has widened about 23bp since last Thursday.
Who’s exposed to Hungary (II)
Hungary, look what you’ve kicked off.
JP Morgan published its analysis of which major European banks are exposed to the eastern European nation earlier this Tuesday. And BNP Paribas’ Ivan Zubo and Olivia Frieser have just followed suit with a rundown of country-by-country exposure to Hungary.
‘It’s the beginning of the endgame for…’ Belgium?
File this on under Sovereign crisis –> eurozone –> the search for the next Greece.
Sharp-eyed readers may have noticed a little dig in Independent Strategy’s note on sovereign contagion. Belgium,
‘A financial earthquake’
Here’s a eurozone-focused — but very eloquent — description of the sovereign contagion problem.
From Independent Strategy:
In engineering there is a stress point when a structure will start to vibrate at what is called its “natural frequency” (think of a bicycle frame at speed).
CDS report: Market still sees significant near-term risks to Greece
Here in the credit markets we’re becoming used to political fireworks on a Friday. Those hoping for a quiet end to the week have been disappointed; the sovereign credit markets tending to display more than a modicum of volatility.
Fortis, the former Belgian-Dutch bank…
The three-cornered rescue of Fortis last weekend, whereby the Belgian, Dutch and Luxembourg governments agreed to inject €11,3bn of emergency funds, clearly hasn’t worked.
On Friday, the bank was split asunder – the Dutch assets (the bulk of the business) being nationalised by the Dutch government.