Dismal data from French manufacturing and industrial production along with growing chatter of a 'core' Europe strategy having been discussed is sending spreads among sovereign bonds notably wider. As a reminder Italy faces a rather large 1Y bill auction later this morning and the front-end of the BTP curve is underperforming as 2s10s inverts for the first time since August 1994. While 5s10s has been inverted - due to CDS basis technicals - for a few days, the inversion of the 2s10s curve is truly the death knell. French spreads just broke 152bps and Spanish spreads to Bunds also broke to new record wides. Chart: ... (full story)