Global Macro Monitor

Key Data Points
German 10-year Bund 16 bps lower;
France 4 bps wider to the Bund;
Belgium 2 bps wider;
Ireland 21 bps wider;
Italy 50 bps wider;
Spain 11 bps wider;
Portugal 26 bp wider;
Greece 13 bps wider;
Large Eurozone banks weekly change,  -1.0 to -3.0 percent;
Euro$ down 1.26 percent.

Comments
– Italy voted against three years of German-led austerity with no party receiving a majority in the upper house making it difficult to form a governing coalition.  Italian bond spreads widened 50 bps;
– “Italy remains in a state of political flux this morning. Pier Luigi Bersani, the centre-left leader whose hopes of winning this week’s general election were dashed, has this morning ruled out a Grand Coalition with the centre-right.” – Guardian;
– February eurozone PMI increased to 47.9 vs 47.8 in January.  Still contracting even though Germany is expanding;
– The euro fell to its lowest level of 2013 after reports showing record unemployment levels and weak manufacturing PMIs;
– Spain’s recession worsened in Q4, with GDP contracting 0.8%.

***************************************************************************

A SENSE of humour in adversity can be attractive, but it is not always useful. Confronted by the worst recession in their country since the 1930s and the possible implosion of Europe’s single currency, the people of Italy have decided to avoid reality. In this week’s election a quarter of the electorate—a post-war record—did not even bother to show up. Of those who did, almost 30% endorsed Silvio Berlusconi, whose ruinous policies as a clownish prime minister are a main cause of Italy’s economic woes. And a further 25% voted for the Five Star Movement, which is led by a genuine comedian, Beppe Grillo. By contrast, Mario Monti, the reform-minded technocrat who has led Italy for the past 15 months and restored much of its battered credibility, got a measly 10%.

– Economist

(click here if charts are not observable)