- "Investors are all aboard the periphery train, and there's now simply no margin for error," says BAML's Obe Ejikeme, commenting on his firm's fund manager survey for May. A net 36% of the respondents say they're overweight eurozone stocks, up from 30% in April, with the equities of Spain (EWP) and Italy (EWI) are preferred to those in the core.
- Ejikeme also calls long bets in EU periphery debt the most crowded traded globally. Indeed. Spanish 10-year debt is now priced to yield 2.93%, Italy 2.97%, Ireland 2.67%. As comparison, U.S. 10-year Treasurys yield 2.63%.
- ETFs: VGK, FEZ, DFE, IEV, EPV, EZU, HEDJ, GXF, GUR, FEU, FDD, FEP, ESR, UPV, ADRU, FEEU, EURL, EUDG, EURZ, FIEU, DBEU