European bank stocks are trading poorly again with Soc Gen in particular falling to the lowest level since Mar ’09. The European bank stock index is trading down more than 2% as the debt of Italy, Spain, Portugal, Greece are lower. I specifically didn’t mention Ireland as they’ve been a credit standout of late as the market grows more confident in their ability to deal with their debt issues. Greek 5 yr CDS is rising another 200 bps to above 3200, up 1000 bps this week alone. Italian CDS is trading near their record highs. The G7 meets today and tomorrow and I don’t expect anything new. Greece will run out of money again within weeks if they don’t get their next tranche of money from Bailout 1. China’s Aug CPI rose 6.2%, in line with expectations and down from 6.5% in July. PPI rose 7.3%. IP was up 13.5%, a touch below estimates while Retail Sales were up 17%, in line. The Shanghai index was little changed as while the PBOC may be done tightening policy, inflation rates still this high keeps them from easing. After Australia reported a disappointing jobs report yesterday, the other major commodity country, Canada, also missed estimates with an unexpected drop in overall jobs.
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