In response to Friday’s Fitch downgrade of Spain, the Spanish 2 yr yield has risen 26 bps and 5 yr CDS has risen 30 bps to 245, just 30 bps from the record high of the pre bailout panic. Chinese stocks fell for a 2nd day after a report on Monday that Shanghai may institute a property tax and both the state and private sector weighted mfr’g indices fell in May. The private sector one specifically fell to the lowest since June ’09. Also, Chinese passenger car sales rose 25% in May, a slowdown from the 34% rise in April. Economic confidence in May in the euro zone, out Monday, fell to 98.4 vs the forecast of an unchanged reading of 100.6. While Germany reported a very good May jobs figure, unemployment for the entire region in April rose to 10.1%, the highest since June ’98. In the anecdotal dept, after BCSI cited the European slowdown last week, in the FT Hitachi said “the financial confusion in Europe is affecting various parts of our business.”
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