Italy's 10y risk spread over Germany rose >2OObps, for the 1st time since March w/Italy 10y yield on course to 5%
Source: HolgerZ, Bloomberg
HAVE YOU EVER HEARD ABOUT DE-EUROIZATION ?
Based on SWIFT international payments, we are witnessing 'de-euroization' and not 'dedollarization. The euro's share in SWIFT global payments has dropped to 23% from 38% at the start of the year. Are Russia's SPFS and China's CIPS eating up the euro? Meanwhile, China's share in SWIFT payments reached an all-time high of 3.47% in August. Source: HolgerZ, Bloomberg
Sentiment among consumers in Germany keeps deteriorating as persistently high inflation encourages people to save & blots out chances of a recovery before year-end
GfK German Consumer Sentiment Index drops to -26.5 in Oct from -25.6 in Sep. An indicator BELOW 0 signals YoY contraction in private consumption. Source: HolgerZ, Bloomberg
Concerns over Italy's ability to cut the budget deficit have increased Italy's 10y risk spread over German bunds
The risk spread may expand more if the ECB raises rates 25bps on Thursday. As highlighted by HolgerZ, Italian banks' €380bn of BTPs are central to the €1.6tn so-called sovereign "doom loop." Source: Bloomberg, HolgerZ
Get ready for 0DTEs, Europe
Source: Markets Mayhem, Bloomberg
