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’Those haircut-heavy credit claims [updated with more haircuts]
Update — apologies for a rather disorganised (and long) post… but we’ve finally gained information from all seven eurozone central banks who’ll accept additional credit claims under the ECB’s new rules…
LTRO-ing, with Magnus
Intesa Sanpaolo’s chief executive says he’ll use ECB funds to buy Italian bonds…
BBVA sells the first senior unsecured bond to be issued by a Spanish bank since October… (like Intesa a few weeks ago.
Flash PMIs and Germany’s bragging rights
Europe must grow its way out of this slump! It’s not enough to bail out profligate sovereigns and banks! Capital must be deployed to SMEs! Youth unemployment must be tackled! Fiscal discipline is not enough on its own!
Fire all engines!!
Markit Flash Germany PMI®
German private sector sees fastest growth for seven months in January,
A-A-A… staying alive, staying alive
How significant is the downgrade of France by Standard & Poor’s?
According to some commenters, like the WSJ’s Simon Nixon, not that significant.
But one market which could very well feel an impact it turns out is the repo market.
Rabobank says go Dutch
(We’ll get our coat)
Since there’s a question-mark over who’s going to buy the circa €200bn of fresh eurozone sovereign debt being sold in the first three months of 2012…
We were piqued by Rabobank’s Richard McGuire and Lyn Graham-Taylor argument on Friday that picky investors should look at the Netherlands.
Sovereign downgrades and the eurozone
As S&P decides whether to downgrade Germany and the five other triple-A members of the eurozone, RBS considers who would be hardest hit by the move other than President Sarkozy and his re-election hopes.
Why France could be on the wrong side of the Eurozone crisis
Anyone betting that France will make it through the eurozone crisis because it’s a AAA country (just about), might want to a look at this chart and think again:
The chart, courtesy of Eric Dor, director of research at the IESEG School of Management,
Germany 1 – France 0
Danger, danger: Merkozy tape bombs exploding on Monday afternoon.
They have a deal!
(emphasis ours)
RTRS-FRANCE’S SARKOZY SAYS THE FRANCO-GERMAN AGREEMENT IS COMPLETE, WILL BE SENT TO VAN ROMPUY ON WEDNESDAY
RTRS-SARKOZY SAYS FRANCO-GERMAN PROPOSAL WILL MEAN MODIFIED EU TREATY,
Dexia’s collateral-crunching guarantee
It is an irrevocable, unconditional, direct, autonomous and first demand guarantee. The guarantee is joint but not several, and the allocation between the States (respectively 60.5, 36.5 and 3% for Belgium,
The German bond market is all about ‘buy and hold’
Icap’s weekly European repo report shines some light on recent eurozone bond developments.
For example, it blames illiquidity in German bond markets for causing chaos in the asset class rather than a sudden change in mindset.
The ‘Last Days’ of the Euro
Alternative title: Why France and Germany are likely to strike a momentous deal on fiscal union sooner than anyone thinks.
Welcome back, Jonathan Wilmot.
It’s some time since we heard from Credit Suisse’s chief global strategist (and occasional FT Alphaville contributor) but he’s made up for that with a short,
French bonds — some (parabolic) perspective
Chart of French 30-year bonds’ spread to German debt over the last five years (via Reuters):
We think it’s a good chart… because it shows that investors really, really want Bunds, and this is why spreads even among the AAA members of the eurozone are moving out so much.
French exposure in pictures
Au bout du fossé, la culbute.
Brace yourself. Here are some reasons why markets are giving France, in particular, a kicking today, according to the Banca D’Italia’s latest financial sector report on November 2:
Goodbye risk-free, hello French spreads at 21-year high
Another nail in the coffin for old Europe’s risk free status.
The French 10 year note is now seen as a spread product over comparable Bunds — 153bp at pixel time.
Via Reuters.
(click to enlarge)
According to our quote machines,
Italy CDS vs bonds: CDS win!
Remember a month or so ago when we told you there was evidence that CDS spreads may influence bond yields?
“Influence” is a strong word. It was more about which one leads the other. In our previous post,
Sovereign CDS posterchildren
Now that a debate is brewing over survival probability of the European sovereign CDS market itself, FT Alphaville thought it’d be a good idea to look at some more recent trends in order to try to discern where the demand for these financial products has come from.
Edwards: Going bust and ECB QE
What’s come over über bear Albert Edwards? The day after Europe’s leaders reached a deal (of sorts) to tackle the region’s sovereign debt crisis the SG strategist is relatively chipper:
I have minimal confidence that governments can turn this around within the confines of the eurozone project.
(Mis)pricing the UK
Has the bond market got it right when it comes to the UK?
On Tuesday, Lex investigated why the UK can raise debt at substantially cheaper levels than its eurozone counterparts, in particular France.
The continuing mystery of US banks’ European exposure
Europe may or may not be saved but Q3 earnings releases by US banks suggest they’re content with their exposure to the continent.
We looked at the methodology behind exposure disclosure in this post.
Breaking: Europe is saved! Actually, wait…
Well, you’ve heard of the FT effect, what about the Guardian effect?
“Breaking” on Tuesday afternoon New York time, reports of a €2,000bn deal between Germany and France to augment the EFSF, save the euro,
French bond blow-out, chart du jour [updated]
Things that happened in 1992:
Bill Clinton was elected US President
Queen Elizabeth II had an annus horribilis
The Maastricht Treaty creating the modern EU was signed
Britain and Italy crashed out of ERM (the former forever)
And it is fair to say that in those troubled ERM days,
Eventually, French Spreads Fail (E.F.S.F.) — redux
Some nasty bond moves in the eurozone sovereign debt “senior tranche” at pixel time (also in CDS — chart via Markit)…
(DBR – Germany, FRTR – France, BELG – Belgium, UKIN – United Kingdom, included for solidarité)
Ten-year French government bonds have finally gone and done it – trading more than 100bps wider than German debt.
Undexia
DJ: DEXIA CEO: BANK TO REMAIN PUBLICLY TRADED
Update — speaking of zombies… Interesting to note that the €90bn 2011 edition of Dexia’s state guarantee bears a term of 10 years. The €150bn 2008 version guaranteed debt with a maximum maturity of three years.