The European indices have recovered off there lows but are still closing lower on the day with declines of -0.8% to -1.1%. Concerned about slower growth due to higher inflation taken more center stage. Yields are down sharply.
A look at the closing levels shows:
- German DAX, -1.11%
- France's CAC, -0.81%
- UK's FTSE 100, -0.88%
- Spain's Ibex, -1.1%
- Italy's FTSE MIB, -1.35%
Looking at the benchmark 10 yields in Europe, declines range from -14.3 basis points to -16.4 basis points.
- Germany, 1.627%, -14.4 basis points
- France, 2.164%, -15.9 basis points
- UK, 2.487%, -16.7 basis points
- Spain, 2.694%, -17 basis points
- Italy, 3.642%, -17.5 basis points
Re: fragmentation, the spread between the Italian 10 year and the German 10 year has moved down from 254 basis points to 202 basis points (since the peak on June 14). The pressure is off a bit, but the yield spread is still up from about 136 basis points at the end of 2021.