Friday, June 12, 2015

Grexit Contagion Uncontained - European Peripheral Bond Risk Is Soaring

While talking heads have proclaimed any Grexit contagion will be contained... it appears they are wrong (surprise!). The last 2 days have seen sovereign bond spreads soar 25-35bps for Spain, Portugal and Italy. On the yield side, Spain 10Y spread to Bunds is at its highest since August 2014 and Portugal at its highest since Feb 2015.

EU Sovereign Bond risk is soaring...

The contagion has been rising...

Charts: Bloomberg

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