Stocks, Bonds and Gold all Stumble as Euro Soars

In an almost perfect "taper on" sort of manner, stocks had their worst day since November 7th, the 10-year treasury bond sold off by 4bps, gold finished down $9.00, and the euro rose to the highest level since mid-October, and November 2011 before that. If it weren't for the euro rising and the dollar index remaining flat, it would have been a perfect "taper on" performance.

And in case anyone was wondering, the spread between French OATs and the US Treasury bonds ticked up to the widest level (read French OATs yielding less than USTs) since April 2010 (right before stocks sold off). The risk seeking behavior implied by the OAT-UST spread boasts an excellent correlation with the forward P/E ratio of the S&P 500, though we fear French deflation risk is what is now driving the spread.