The Draghi put is still alive – or at least that’s what the market seems to think, judging by the response to the Italian vote outcome.
The Plunge Protection Team was very evident at the European open…
But as Bloomberg notes, while a rejection of Renzi’s reform proposals was expected, political instability and uncertainty over the fate of the country’s troubled banks aren’t fully priced in, and bank stocks are tumbling (after a panic bid at the open)…
And as the vicious circle between the sovereign and the banking system escalates, so Italian default risk is at 3 yeear highs…
But for now, the market seems to be relieved that the ECB will have yet another reason to extend QE when it meets later this week… which means Buy Euros?
via http://ift.tt/2gH3Xtj Tyler Durden