Records for the safe havens, shame for the PIGS
It was a case of more records for the safe havens on Monday, and more shame for the PIGS. In the currency space, it is the Swiss franc which remains everyone's favourite place in order to restore the value of wealth amidst the continuing perils of owning other major currencies such as the euro, the dollar and the pound. The Swissie fell to a record 0.8033 yesterday (although it has since retraced to 0.8200), while EUR/CHF dropped to a record low under 1.14. The gold price, also in sparkling form as investors similarly flock to the precious metal, climbed through $1,600 an ounce. In contrast, bond spreads for Europe's highly-indebted economies widened significantly vis-a-vis Bunds to new record wides e.g. the IT/GER 10-yr and SP/GER 10-yr spreads were out by another 30bp at one stage, GR/GER was a further 65bp wider, while Portugal was out by another 15bp. European banking shares were pummelled again, with the Stoxx 600 banking index declining to its lowest level since early 2009. |
