The renewed worried overEurope’s debt crisis and its repercussions on the global economy dampened investors’ risk appetite today, pushing the safe haven USD sharply to the upside while the high yielding euro is approaching an 11-year low against the yen.
Franceis in focus today as it is scheduled to sell between 7-8 billion euros of bonds maturing in 2021, 2023, 2035 and 2041, following yesterday’s German auction, which fueled concerns overGermany’s association with the troubled euro zone indebted countries.
Fears started growing this week that euro zone leaders might fail to find a comprehensive solution to the debt crisis which could drag the region into a deep recession and infect the global economy especially afterGreecewarned it might exit the euro zone if the country wont get more financing.
Key economic data from Europe today include Europe’s industrial new orders and the PPI and the consumer confidence fromFrance. Meanwhile inGermanythe retail sales fell in Nov to -0.9% from 0.7% previous, whileUK’s PMI services expanded at a faster pace by 54.0 in Dec from 52.1 previous.
Data later today may show the US ISM non-manufacturing expanded at a faster pace during Dec. while the ADP employment change might show the private sector added fewer jobs in Dec. yet the initial jobless claims might fall last week to 375 thousand, however markets await Friday’s crucial non-farm payrolls.
In Asia stocks fell today ahead of the French bond auction and theUSjobs data, where Nikkei 225 fell 0.83% on worriesEurope’s turmoil will keep demand on the safe haven yen elevated and will hurt Japanese exporters even more. InEuropestocks also fell where the DAX lost 0.49% while CAC 40 fell 0.69%.
The rising worries over the euro zone’s crisis prompted investors to be more cautious, increasing demand on the safe haven USD which is trading as of this writing around the 80.45, adding to the downside pressures seen by the euro which is trading around the 1.2865.
The pound was also dragged downwards trading around the 1.5560, while the AUD fell around 1.0275 as demand on the higher yielding assets dropped. However the yen managed to lost the early gains after the USD strengthened today, trading around the 76.80 level.
Commodities are mixed, as crude oil lost the early gains seen after Europe agreed to ban oil imports from Iran yet no date was set, now crude is trading around $102.60 falling from the highest $103.72. Gold is stronger trading around the $1616.45 as its safe haven appeal rose and China’s possible seasonal buying.
Originally posted here
