By FX Empire.com
As traders are eyeing bond sales in France and Spain and the outlook for Europe and other major economies continues to be uncertain, caution is persisting and markets are moving in tight rages around the opening levels.
Since yields on French, Italian, and Spanish bonds have been rising to euro-era records on concerns the euro zone debt crisis is worsening, sentiment became fragile and more pressures were added on confidence.
While Moody’s downgraded the rating of 12 German public banks, Fitch said that US banks are facing contagion risks if Europe’s crisis is to widen, while the Chinese central bank said Europe’s debt woes may cause “systemic risks” in the global economy.
Spain sold today 3.56 billion euros of 10-year bonds with a euro-area record high yield of 6.975%, while France sold 6 to 7 billion euros of treasury notes, but the auctions proved to be disappointing.
As the appetite for risk is limited, and safe haven is still sought, the spread between French and the German 10-year government bonds rose to a euro-era record high of 200 basis points on Thursday.
After the auctions in France and Spain were over, and UK release an unexpected rise in its retail sales, investors embarked into some risky position, yet with caution, awaiting for the US jobless claims and housing reports.
In Greece, Prime Minister Lucas Papademos won the confidence vote which keeps Greece in the euro area, and now he is trying to finalize next year’s budget in order to receive more funding from Europe.
In Europe, stocks dropped today, where FTSE 100 fell 1.25%, DAX fell 0.82% while CAC 40 fell 1.33% as of this writing, as Europe continues to face many challenges ahead while conditions are widely unstable.
In Asian stocks were volatile today where Nikkei 225 rose 0.19% while Hang Seng fell 0.76%. Oil on the other hand rose in Asia above $103.00 per barrel on news a Canadian pipeline company will ship crude away from a key delivery point in Oklahoma.
The USD is trading as of this writing with a slight bearish momentum around 78.17, yet demand for lower yielding assets will remain strong over the coming period amid rising fears from the European debt crisis.
The euro is trading as of this writing with a sight bullish momentum around 1.3485, while the pound managed to extend its gains after the retail sales report to trade around 1.5765 from the lowest of 1.5689.
The yen was stronger today trading around 76.90. Gold is almost unchanged from today’s opening trading around $1759.50 per ounce. The AUD is slightly weaker trading around 1.0070.
Originally posted here
