The only guarantee of the day is that we’ll see the biggest trading volume of the week solely due to quadruple witch expiration and the S&P quarterly rebalancing. Outside of that, the only discussion of note is the upcoming release of the individual European bank stress tests. Ahead of them over the next month, 3 month Euribor rose to the highest since Oct ’09 today as bank nerves have yet to be calmed. Austria said they will release the results of their test next Friday and there is talk that STD and BBVA, the 2 largest banks in Spain, actually scored the highest of all the large banks in Europe. Both stocks are up 2.5%+ and the IBEX is higher by 1%. The problem though with Spain is the rest of their banking system, particularly the smaller Caja banks. Spanish 5 yr CDS at 224 bps is lower by almost 20 bps and at the low of the week. An aside, the Shanghai index quietly fell to within 2 pts of its lowest level since Apr ’09.

Category: MacroNotes

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