Stress and Contagion Return to Europe

"Greece has the worst performing bonds in the euro zone, with 10-year spreads to Germany blowing out 80 bp this week and 136 bp this month. It retakes the worst-performing mantle from Ireland, whose 10-year spreads are up 53 bp and 107 bp over those same periods. CDS prices are mirroring this move, with 5-year Greece close to 900 bp today vs. the recent low around 665 bp in mid-October. Contagion is in full force, as Greece, Portugal, and Ireland have all been in the market cross-hairs in recent days. Spain and Italy are holding up better, but spreads and CDS prices for both have also been creeping up recently..."