Spanish yields may have reversed gains late in today’s session but risk aversion within Europe continues to ride high.
Two excellent indicators of market jitters are flashing major warnings.
- EUR/CHF. The cross is edging back toward the 1.20 floor put in place over a year ago by the Swiss National Bank.
2. The yield on the German 2-year “Schatz” is back below zero, ending today at -0.03. As the Eurogroup grapples with the sustainability of Greek debt, investors reach for the safety of German paper, willing to accept less than they invest for the prospect of a safe return of the vast bulk of their principle.
