European banks have been a disappointment lately
European banks (EUFN) have been one of the worst performing sectors both in Europe and globally over the past 12 months. As shown below, the iShares MSCI Europe Financials ETF has underperformed MSCI World, S&P500 and MSCI Eurozone by 16%, 20%, and 6% respectively. There was a rally in March-April due to better than expected 1Q results, however, it was short-lived.
Source: Bloomberg
Such a subpar performance should come as no surprise given the recent developments in the European sovereign bond market. As the chart below