Sentiment Dampened on Renewed Debt Concerns

As the US was on holiday, the market focus was on Europe where renewed concerns over sovereign crisis in the European periphery damped sentiment. Peripheral yield spreads rallied and European bourses slumped as led by the banking sector as the defeat of Merkel may increase the difficulty of pushing the new EFSF. Meanwhile, the ECB and the IMF were in disagreement regarding the capital requirements of European banks. This intensified worries that it would take even longer for the issue to be resolved. Fears and uncertainties increased demand for safe-haven with gold jumping above 1900 again today, the first time since August 23, while the USD also advanced against major currencies. Oil continued to follow equities' track with the Brent crude contract losing -2.00% before recovering today.

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Sentiment Dampened on Renewed Debt Concerns