Metals Face Persistent Pressures from Europe

SHANGHAI, Nov. 17 (SMM) – Bad news from Europe seems have no end. After Treasury bond yields climbed in more Euro zone countries on November 15th, the European Central Bank restarted debt purchases for countries like Italy, Spain and Portugal. This move did not provide what ECB had wanted, though, with both debt yields of Euro zone countries and the US dollar index continuing to rise. Stocks and metals etc. assets therefore are being depressed.

The risk aversion sentiment strengthened after Fitch said contagion of the European debt crisis would put ratings of U.S. banks in danger. At present investors will focus on sales of Spanish and French debt. Though Italian Prime Minister Monti announced members of his temporary cabinet, which did provide some support for global market, the U.S dollar continued to strengthen and even hit a 5-week high. News during recent two days shows that the panic in Euro zone financial markets is worsening. This is an exact reflection of the Euro zone debt crisis. US stock markets also slipped worrying debt woes in the Euro zone will hurt the US economy. The Dow Jones Industrial Average, for instance, dropped 190.57 points or 1.58% to 11,905.59. That compared to losses of 1.66% and 1.73% for S&P 500 and NASDAQ Composite respectively.

As the European debt crisis remains unsolved, turbulences of various kinds caused by the issue will in a relatively long term influence investor decisions, thereby depressing demand for stocks and commodities etc. risky assets and in the mean time leading to lower possibilities for metals to stabilize.