It seems the ECB was actively buying Italian BTPs on the secondary market to support them, although most EU sovereign leaked wider in to the European close, BTPs finished just under 7%.
Subordinated Financial Credit in Europe underperformed throughout the day and leaked lower in to the EU close. It's not hard to believe or understand that European equities were stronger then credit for the day. As mentioned sovereign debt leaked wider, Spain and Portugal were the worst performers on the day, not surprisingly given yesterday's news that Spain would miss the 6% to GDP debt and revised it higher to 8% and also said in the coming days it may be revised higher again. As I have been preaching ad nauseum, France is the sovereign debt to watch and not surprisingly given earlier chatter regarding an impending S&P downgrade, France was wider on the day. Thursday is D day for France with multiple issues on the auction block. As a reminder, French yields are an important metric because they do not qualify for the same ECB secondary bond purchases that has held the Italian BTPs at the 7% level, which is the red zone, without the ECB buying up the secondaries (as seen in my post last week showing the ECB balance sheet expansion-most likely leveraged well over 30x at this point-or about the same as when Lehman failed), Italian BTPs would likely be in the high 7% range (7% is the unsustainable debt level in which Greece, Ireland and Portugal all sought bailouts).
So with Europe closed, it's just FX traders moving the Euro, something I wouldn't read too much in to.
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