Bank funding cost rocket launches in Europe

I would not have thought it possible a few months ago but Australian bank funding costs have fallen below those in Europe as Brexit occupies global market’s risk matrix. Last Friday CBA CDS fell to 84bps while Credit Agricole jumped to 90bps:

The US and Europe have one trading day in hand so I’d expect to see a sizable lift in spreads here today. Even so, the Ponzi Index has really crashed now:

And local banks are even out-performing oil-linked high yield:

This looks like an overshoot to me now. Aussie bank funding costs will come under further pressure from Europe and Asia as China slows in H2. Indeed if Brexit transpires and drives up the US dollar just as China slows then the upside in Australian bank CDS prices is big.