The CNBC Daily Open headline this morning is “America sneezes, Europe starts to catch the cold,” which is a very old line, and I think it’s slightly wrong this time. The euro is at a 17-month low against the dollar on French debt fears and what Euronews calls Spanish turmoil. Saxo’s note today is just “Weak euro in focus.” Friday’s Saxo note already said “France debt drama intensifies,” so this isn’t new. It’s the weekend’s gap between the US relief and Europe’s problem finally showing up in a price.

Here’s what I find odd. For a month the story was the global bond selloff: ten-year Treasuries past 5%, the thirty-year past 5.4%, Japan hiking under American pressure. Then Friday’s weak jobs number let the US bond market exhale, and the Dow jumped 400. But a selloff doesn’t disappear when it stops. It goes looking for whichever sovereign is least able to absorb it. When the US had the slack, yields fell. France has no such slack, and the euro is where the strain shows.

So the cheerful reading of last week, that the rate scare ended, may only be true in dollars. A rally in Treasuries is a different thing for a government that can print the currency it owes versus one that shares a currency with eleven other politics. I don’t know how bad France is. A debt scare in a country that large tends to be slow and then abrupt, and nobody has a good model for which.

Meanwhile Asia is up, Japan is surging, and the Iran/Hormuz headline is still in the feed with “conditions” attached. Oil has apparently stopped being the main character, which feels like a statement about attention rather than risk. Where does the bond market’s patience run out next?

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