Opposite Day.

Right, so Wednesday was in many respects just the opposite of Tuesday.

BTPs and Italian equities bounced back early on and news that Five Star is backtracking on Savona buoyed sentiment further. Here’s Reuters:

The leader of Italy’s anti-establishment 5-Star Movement on Wednesday appealed to the far-right League to drop its insistence that euroskeptic economist Paolo Savona should be economy minister in a government of the two parties.


“Let’s find someone of the same caliber as Savona, who would still remain in the government in another ministry,” 5-Star chief Luigi Di Maio said on Facebook after meeting with President Sergio Mattarella. “If the League agrees … we can still form a government.”

As Savona was the sticking point, that might help allay fears about Five Star’s penchant for adopting an aggressively anti-euro stance on par with that generally espoused by League.

Italian 10Y yields were richer by some 25bps on the day, but I mean, despite today’s rally, it’s a shitshow:


The euro, already rising on the heels of a raft of upbeat econ data out of Germany, got an extra boost from the Five Star headlines:


This was the best day for Italian stocks in nearly two months:


Best day for Italian banks since early February, trimming days of egregious losses:


The lira rallied again as the market seems to be getting more confident in CBT’s ability to fend off Erdogan in the interest of supporting the currency. Here’s a chart going back to last week’s emergency rate hike:


EEM rallied on the day, but it’s worth noting that the index is sitting near a six-month low:


First day of gains in more than a week for crude, which jumped 2.3%:


It’s been a fun week already for U.S. stocks:


Record high for small caps:


Bill Gross had his worst day in four years on Tuesday and while you can read the full story here, this is the visual:


That’s probably at least in part attributable to the Treasury rally on Tuesday, which reversed itself a bit today as 10Y yields rose ~6bps.


Oh, and finally, if you’re wondering what Donald Trump thinks about Roseanne calling African Americans “apes”, just know that as usual, he thinks the real victim here is Donald Trump:


One last thing. Hucka-San needs you to understand that while that tweet might seem like an absurd way to frame the issue (especially coming from the goddamn President), he’s just “calling out hypocrisy”:

Whataboutism” at its finest.

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