European bond market upheaval this morning highlights a depressing trend for Canadian investors. You can basically throw the recent quarterly bank earnings results out the window, because Canadian bank stocks remain lashed to the mast of European credit issues.

Domestic banks stocks are likely to open lower this morning despite last week’s strong (if mildly problematic) set of quarterly earnings. Once again, the problems stem from Europe. The announcement that Italian Prime Minister Mario Monti is set to step down was met immediately with a market sell-off that sent two year Italian government issues lower by almost a full percentage point.