Awaiting ECB Stress Test – Good One

This coming Sunday will see the results of the ECB’s stress tests. Eagerly awaited by some, feared by others.
Well it appears the only reason there was support for the European peripheral bond markets over the weekend was the fact that they were closed! From the opening this morning the trading theme was, “risk-off”. The talk was that initial weakness came from Spain’s, Bono’s (after last weeks poor auction tap), Portugal’s PGB’s and Italian, BTP’s. 10yr spreads were +17, +15 and +13bp respectively. At this stage the rumours were HF selling, PIMCO (rumoured again) the suspension in trading of shares in Italian bank Monte De Paschi obviously did not help. 
Regardless, it is becoming more apparent we are in a risk off mode and that is unnerving the markets; especially when bonds are supposed to be a safe-haven!