Investor Checklist: Europe’s Debt Dominoes, IMF Triggers, and ECB’s Digital Euro Track Europe’s economic stress with this investor checklist: IMF bailout watch, BTP–Bund and OAT–Bund spreads, CDS signals, iTraxx levels, ECB digital euro milestones, and cash-limit laws. Stay ahead of contagion risk.

1) IMF “Bailout Radar”

  • What to watch: New/active IMF programs; Article IVs ≠ bailouts.

  • Where: IMF lending/programs hub (master page); scan newly approved arrangements and press releases. IMF

  • Signals: A major EU sovereign opening talks for a program (not just Article IV) = risk-off across EU credit. (Contrast with emerging-market approvals in Reuters to calibrate what a real program looks like.) Reuters+1

  • Action: If a large EU member formally seeks IMF support, cut EU HY credit and trim peripherals, add UST duration.

2) Core Peripherals — BTP–Bund 10Y (Italy vs. Germany)

  • What to watch: 10-year yield spread (bps).

  • Where: Borsa Italiana real-time spread page (BTP–Bund). Borsa Italiana

  • Context: Sub-100 bps has happened (rare, bullish); spikes >200 bps = fragmentation stress. Reuters+1

  • Action:

    • >200 bps: Hedge EU equities; rotate to quality/USTs.

    • <120 bps and falling: Add beta to Italy financials/IG credit tactically (tight stops).

3) France — OAT–Bund 10Y

  • What to watch: 10-year France–Germany spread.

  • Where: Borsa Italiana OAT–Bund spread page (live). Borsa Italiana

  • Trigger: Sustained >80–100 bps indicates France-specific risk (ratings/politics) spilling into core.

  • Action: Reduce euro banks and EU cyclical exposure; add USD assets.

4) Sovereign Default Perception — CDS (5Y)

  • What to watch: France & Italy 5Y CDS (bps).

  • Where: Public snapshots (Investing.com; WGB). World Government Bonds+3Investing.com+3Investing.com+3

  • Trigger: France >50–60 bps or Italy >150–200 bps and trending = stress regime.

  • Action: Cut peripheral duration; favor USTs/gold over EUR credit.

5) Market-Wide Credit Risk — iTraxx Europe (Main & Xover)

  • What to watch:

    • iTraxx Europe Main (IG) 5Y

    • iTraxx Crossover (HY) 5Y

  • Where: ICE/Markit product pages (overview & contract specs). ICE

  • Trigger: Main >90–100 bps or Xover >450–500 bps = credit risk on; delever EU beta.

  • Action: Hedge with iTraxx (if accessible) or via EU equity index puts; upweight USD IG/USTs.

6) Core Anchor — German 10Y Bund Yield

  • What to watch: Absolute level & moves vs. peripherals.

  • Where: Bundesbank daily yields; Investing.com/FT for quick charts. Bundesbank+2Investing.com+2

  • Trigger: Bunds rally hard while spreads widen = classic flight-to-quality (F2Q).

  • Action: Lean into duration hedges; avoid peripheral banks.

7) ECB “Capital Frictions” — Digital Euro / Policy Milestones

  • What to watch: Digital euro preparation-phase progress & governance/legal updates.

  • Where: ECB digital-euro progress page + latest prep-phase press releases. European Central Bank+1

  • Trigger: Movement from prep → decision to issue (post-legislation) would be a step toward tighter payment architecture; watch for limits/privacy design.

  • Action: If issuance decision nears, reassess cash-intensive business models and cross-border funds flow assumptions.

8) “Cash Rules” Reality Check — EU Cash Limits

  • What to watch: Legal caps on cash payments and reporting of large withdrawals.

  • Where: Spain anti-fraud law explainer and government guidance (caps at €1,000 for many B2C/pro transactions; reporting of large withdrawals ≈ €3k+). ICE+1

  • Trigger: New caps or tighter reporting = rising friction.

  • Action: Prefer high-liquidity listed assets over physical-cash dependent strategies.

Quick weekly routine (15 minutes)

  1. Scan IMF page for any new EU program headlines. IMF

  2. Check BTP–Bund and OAT–Bund spreads (are they widening together?). Borsa Italiana+1

  3. Note France/Italy 5Y CDS and iTraxx Main/Xover levels vs. your triggers. Investing.com+2Investing.com+2

  4. Glance at Bund 10Y (F2Q tells). Bundesbank

  5. Skim the ECB digital-euro page for milestones or fresh pressers. European Central Bank+1

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