Greece's
financial crisis and signs of growing opposition to austerity in Spain
sent the euro to its lowest level in a month on Tuesday, while shares
and commodities took a knock as the dollar powered higher.
Europe's
main markets returned to action after a long weekend with the mood
unsettled by Sunday's strong local election showing by anti-austerity
parties in Spain, while bets were put back on a U.S. rate hike this year
after having been all but canceled over the past two months.
Europe's stock markets fell between 0.5-1.3 percent <0#.INDEXE> as early resistance gave way and a fall by the euro back below $1.09 mirrored signs that contagion from the region's debt problems was creeping back into bond markets.
A flight into traditional safe-havens saw Switzerland's 10-year bond yields CH10YT=TWEB drop into negative territory for the first time this month as Spanish ES10YT=TWEB, Portuguese and Greek bonds saw fresh selling. [GVD/EUR]
The biggest global currency, the dollar, was another beneficiary as it continued its strong run following Friday's robust inflation data and comments from Federal Reserve chief Janet Yellen.
"The outlook for Fed policy normalization is again gaining traction and certainly with Greek risk there is nothing that would dampen this trend," said Ulrich Leuchtmann head of FX strategy at Commerzbank in Frankfurt.
"There is good reason for continued dollar strength but if it goes too quickly we will see the same thing as happened in March and early April because there will be the question about what effect it will have (on the U.S. economy)."
Europe's stock markets fell between 0.5-1.3 percent <0#.INDEXE> as early resistance gave way and a fall by the euro back below $1.09 mirrored signs that contagion from the region's debt problems was creeping back into bond markets.
A flight into traditional safe-havens saw Switzerland's 10-year bond yields CH10YT=TWEB drop into negative territory for the first time this month as Spanish ES10YT=TWEB, Portuguese and Greek bonds saw fresh selling. [GVD/EUR]
The biggest global currency, the dollar, was another beneficiary as it continued its strong run following Friday's robust inflation data and comments from Federal Reserve chief Janet Yellen.
"The outlook for Fed policy normalization is again gaining traction and certainly with Greek risk there is nothing that would dampen this trend," said Ulrich Leuchtmann head of FX strategy at Commerzbank in Frankfurt.
"There is good reason for continued dollar strength but if it goes too quickly we will see the same thing as happened in March and early April because there will be the question about what effect it will have (on the U.S. economy)."
No comments:
Post a Comment