SHANGHAI, Nov. 18 (SMM) – Global markets have been facing intensive pressures due to the European debt crisis. Surges in debt yields for Spain and France on November 17th also significantly damped investors’ confidence for financial assets.
Spain sold on November 17th in total 3.563 billion euro of Treasury bond. The interest rate for Spanish 10-year bond hit 6.975% during the day, a euro-era high and also a new high since 1997. France on the same day sold 6.98 billion euro of two-to four-year bonds, with borrowing costs rising from the last time of sales. These are convincing signs that Spain and France will also face the impact of the Euro zone debt crisis. Stocks and futures markets in both Europe and the U.S. widened losses as a result of mounting worries towards the global economic outlook, with the Dow Jones Industrial Average plunging 230 points before closing 134.86 points or 1.13% lower at 11,770.73. For other mainstream indexes, the S&P 500 lost 20.75 points or 1.68%, the NASDAQ Composite lost 51.26 points or 1.96% and the STOXX Europe 600 lost 1.3%.
Meanwhile, there were also media reports that a Euro-zone official denied possible plans for a Italian bailout with the European Financial Stability Fund, which added to losses in futures market with the CRB index plunging 2.48%. LME metals also slipped during the day. Commodity may face extended losses if the European debt crisis, which has been hampering recovery of Euro-zone economies, can not be solved in a timely and orderly manner. SMM expects performance of metals in Shanghai to stay weak in the short term.