Living the dream

The iTraxx senior financials index closed at 142bp on Thursday, 2bp inside where it finished on the eve of the Italian election. Spanish 10 year yields, at 4.93%, are poised to test levels not seen in two years. Fundamentally, though, nothing has changed. European growth continues to splutter close to zero — and with every downward revision to GDP, budget deficits relative to growth must rise.