Friday marked a fittingly eventful end to an already eventful week.
Renewed political turmoil in Spain conspired with more weakness in Italian bonds and dramatic price action in crude to send everyone off to the holiday weekend with a lot to think about.
Here’s stocks on the week:
Oil plunged on Friday as Al-Falih caved to Trump:
The U-turn is visible on the long-term chart (still a blip, but it’s notable):
Oil currencies not loving that – two-week low for CAD:
But don’t worry if you’re a loonie bull:
The dollar got a boost from plunging crude on Friday and managed to eke out another weekly gain. Friday’s move basically negated the Fed minutes weakness:
Treasurys rallied. Oh, what a difference a week makes:
Breakevens followed crude lower on Friday:
Biggest weekly flattening in the 2s10s since the end of March:
In Europe, safe haven bunds logged their best week in more than two years as political risk in the periphery drove a safe-haven bid:
News that Ciudadanos is set to back a no-confidence vote against Rajoy means Spain now joins Italy on the list of countries causing consternation for markets. Call it the “triple-digit spread club”:
The front end in Italy is getting extremely concerning. 2-year spreads over bunds ballooned on Friday to multi-year wides amid more bear flattening in the BTP curve.
Default concerns are mounting here.
Italian equities are on the verge of falling into correction territory:
And the outflows are piling up:
Friday was the worst day for Spanish equities in 3 months:
First weekly loss for European stocks since late March:
And I think we’ll call it a day on that because if you’re not already at the bar by 4:10 pm on a Friday evening, well then what the fuck are you doing with your life?
We’ll leave you with the following image which, for once, relates to something positive Donald Trump managed to get done:
— Sarah Sanders (@PressSec) May 25, 2018