Risk aversion continues to dominate as weaker US numbers add to euro woes
Concerns about unfolding events in the euro zone continue to cast a dark shadow over the financial markets landscape. Global equity markets fell further yesterday including on Wall Street where the S&P closed at a four-month low with losses of around 1.5% last night while the Dow Jones Industrial Average posted its eleventh loss in twelve days. Overnight ratings announcements certainly do little to alleviated investor concerns about the health of government and banking sector balance sheets, as Moody’s last night lowered debt ratings on 16b Spanish banks while Fitch cut Greece’s rating citing the risk that the country may not be able to sustain euro membership. Weaker US economic numbers on manufacturing and jobs certainly didn’t help the mood yesterday, with heightened risk aversion seeing US and German bond yields trading at or close to record lows this morning.
