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| Wim Duisenberg at the 2001 Spring Meetings APRIL 26–30, 2001, Washington D.C. (Photo credit: Wikipedia) |
The recently resurgent yen also gave up some ground against the dollar and euro, but market participants expected it to face continuous upward pressure this week from Japanese repatriation ahead of half-year book-closing. A drop in German business sentiment to its lowest since early 2010 stoked concerns about a slowdown in the euro zone's largest economy, despite the European Central Bank's recently announced bond-buying plan.
Spain also remained in focus, as its government bond yields rose on concerns that the country is dragging its feet in requesting the international bailout that most market participants expect, through facilities such as the European Stability Mechanism (ESM).
"Market sentiment weakened amid signs of weak EU growth and worries about whether Spain will accept conditionality in exchange for ECB and ESM support," said strategists at Barclays in a note to clients on Tuesday. "Growth worries are also spreading to other parts of the world, includingChina," they said.
Germany's Ifo think tank said its business climate index fell to 101.4 in September from 102.3 in August. A Reuters poll of 45 economists had forecast a slight rise to 102.5. This week, Spain is expected to unveil new structural reforms and its draft budget plan for 2013. Investors also await results of stress tests on its banking sector. A Moody's credit review of Spain is also expected this week, and the ratings agency could downgrade Spanish debt to junk status, although it has said it would welcome news of an aid request. ... Continue to read.
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