Following news of the victory of the “pro-bailout the French and German banks party” known in Greece as “New Democracy”, the euro sailed to 1.2760 and a lovefest in the Asian equity markets began.

However, the rally in the euro did not last long. There was no rally in the European bond markets to begin with. The US stock market opened in the red.

Euro 15-Minute Chart

click on chart for sharper image

Chart from Barchart

The rally in the euro lasted about 39 candles, 585 minutes, or roughly 9.75 hours. It was essentially straight downhill once the European markets opened.

European Bond Market Revolts Already

The far more important European bond market never got going in the first place as the following charts from Bloomberg show. 

Spain 10-Year Yield Hits Record High 7.28%

Chart from Bloomberg.

Italy 10-Year Yield Hits 6.17%

Chart from Bloomberg.

Greece wants to stay on the euro.
How long will Spain and Italy? What about France?

For further discussion, please see Greek Election Sideshow; Socialists Win Absolute Majority in France; How Long Will the Bond Market Celebrate Another Glorious Can-Kicking Exercise?

Mike “Mish” Shedlock
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