Fears of contagion swept through the European session yesterday, as yields rose on Spanish and Italian bonds and investors found the safety of Gold. The recent positive sentiment towards the US had led to the overhanging issues of Europe been overlooked. However following the disappointing employment figures from the US on Friday combined with bearish data from Europe has led to a reignition of fear. The yield on the Mediterranean Government bonds is close to previous levels that promoted bailouts.
German politicians continued to deny there is an issue and an ally of Angela Merkel stated: “Why would we worry about Spain now? I don’t think there’s anything that’s going to be a difficulty at the moment.”
Yesterday’s European Index performance:
FTSE 100 down 2.24%
FTSE MIB down 4.98%
CAC 40 down 3.08%
DAX down 2.49%
Overnight equities in Asia fell following the poor US and European sessions as the benchmark index heads towards its long consecutive losing streak since August. The regions political tension has been ramped up by the ever defiant North Korea pushing forward with a rocket launch. As the impoverish nation continues to ignore international pressure, commentators are quick to highlight the risk the country is to to regional stability.
After Facebook’s acquisition of the photo social network on Instagram and Apples market cap at $600bn some analysts are warning that similar episodes happened just prior to the dotcom collapse.
S&P report says the Swiss bank system is among the least risky.
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