Equities ended at the lows today after Exxon Mobil finally gave up and moved down
Fixed income markets continued the strength in govenments, but some of the dislocation in swap spreads from earlier in the day came back. Among them 30 yr EU swaps, that finally got involved in the fixed income rally.
Agency spreads tried to make a come-back, but the last hour government rates rally/equity fall stopped it.
Other credit markets was hurt with CMBS spreads leading the way with The Markit CMBX index of credit-default swaps tied to AAA rated bonds rose 1.45 percentage points to 8.85 percentage points following stories "sub-prime" elements.
Bunds reached 121+ the target from 2005 highs since we broke 118.83 and that might stop the market for now as we also have options expiration Friday, but with the market turbulence and the economic outlook new and higher targets make sense.
Eurostoxx actually held in pretty well today until the close. If we should reach same levels as for S&P (matching the lows in 2002) sub 1900 levels would be the target, probably not Friday, but who knows !
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