Market Brief
European news have kept markets lower, continuing from Friday as a series of weak data have kept risk appetite to the lows and Dollar continues its strength on fears of the debt issues worsening in the EU region. Spanish elections saw the defeat of the Socialist party; S&P may lower Italy’s credit rating which stands at A+ although the outlook has been kept on negative, Fitch cut Greek credit rating three levels to B+ from BB+ and remains on negative watch, Bundesbank on Friday said that Euro could decline as the German economy could start to lose momentum in growth which has led to further weakness in the Euro against all majors. EURUSD dropped to lows of 1.4021, EURCHF dropped to 1.2347, USDJPY moved higher to 82.03, AUDUSD fell to 1.0539 on speculation that Asian stock losses could damp demand of high-yield currencies, GBPUSD moved down to 1.6164, Gold steadied from highs of $1520 and has remained stable at $1508 levels. Asian stocks fell the most in two months, and Oil and metals dropped after fears of EU debt issues to grow stronger. MSCI Asia Pacific index dropped 2.1%, Nikkei dropped 1.52%, Hang Seng dropped 1.92%, Dollar has gained against all majors after Chinese manufacturing was lower than expectations and on speculation that it could decline further on strong tightening measures.
Germany and EU release manufacturing and service sector data while ECB members Bini Smaghi, Tumperel-Gugerell, Ordonez speak on the economy. Focus is still strong on persistent EU issues and markets will wait of any fresh developments as US calendar remains empty today with focus on Thursday’s GDP data due.
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