In Spain, the political opposition has called for the resignation of Spanish Prime Minister, Mariano Rajoy, on allegations of illegal receipt of payments. In Italy, concerns climbed after it was shown that Silvio Berlusconi was leading the polls as the country’s next Prime Minister.
The situation was further aggravated after statistics showed that US factory orders failed to meet expectations with an increase of only 1.8% in December, lower than the median forecast of 2.3%.
In Europe, the UK’s FTSE shed 100 points (-1.6%) to settle at 6247 whilst Germany’s DAX slashed 195 points (-2.5%) to settle at 7638. France’s CAC decreased 114 points (-3%) to settle at 3660.
In the US, the Dow Jones fell 130 points (-0.9%) to settle at 13880 whilst the S&P declined 17 points (-1.2%) to settle at 1496. The Nasdaq decreased 48 points (-1.5%) to settle at 3131.
In the commodity space, crude oil futures for March delivery declined $1.16 (-1%) to settle at $96.17 per barrel for the same reasons equities fell.
Gold futures for April delivery climbed $5.80 (+0.4%) to settle at $1,676.40 per ounce as the aforementioned uncertainties whet investor appetite for safer alternatives.
In the currency space, the Japanese yen finished higher against the US dollar on the back of the country’s initiatives to implement further monetary easing.
The euro declined against most of its peers for the same reasons international equity markets tanked. The US dollar finished higher against most of its counterparts for the same reasons gold advanced.
Today will see the release of the following data: trade balance (11:30am, AEDT), HPI (11:30am, AEDT), cash rate (2:30pm, AEDT), and the RBA rate statement (2:30pm, AEDT).