As global equity market tumbled on concern that euro zone banks' fragility might stall economic recovery, risk-off trades dominate currency market. Euro zone banks have to repay an economic stimulus emergency loan amounting up to 442 billion euro to ECB on Thursday.
Dow Jones Industrial Average fell 2.65% today to 9870, and S&P 500 index fell 3.1% to 1041, the fourth test of this level since October 2009. US 10 year treasury yield fell to below 3%, an ultra low level indicating dim long-term outlook. The euro dipped below 1.22 against the dollar and fell sharply to around 108 versus the yen.
Weak economic data coming up later in the day raised risk aversion further. US consumer confidence fell steeply from 63.3 to 52.9, far below the expectation of 62.
US Conference Board today corrected an error in calculating China's leading indicator, and revised the reading from 1.7% to 0.3%. A slow down in the economic growth of one of the world's biggest and fastest growing economy, China, would directly lead to a shrinkage in demand for commodities and international trades. Crude oil fell more than $2.50 to around $75.70 per barrel.
The following session will focus on UK Q1 GDP and US ADP private sector job report.
