• The euro continues to plummet today on fears the eurozone debt crisis will spread to the triple A-rated France after the government’s bond yields came under pressure. Spanish 10-year government bond yields remained elevated while Italy’s 10-year bond yields jumped above the 7% for the second time in a week, a level considered to be unsustainable. Risk aversion in the market is heightened and Asian equities tumbled as credit contagion spread further across the eurozone. Eurozone Gross Domestic Product revealed a modest 0.2% expansion in the third quarter of this year, the same pace as in the second quarter. Versus the greenback, the single currency slipped to a fresh one-month low at 1.3428 from 1.3640, a decline of 1.6%. Focus turns to the eurozone Consumer Price Index data where a stronger than expected figure may dim expectations for a further interest rate cut by the European Central Bank.
• The US dollar was stronger against a basket of currencies yesterday as high risk aversion spurred a higher demand for the safe haven currency. US Retail Sales data showed a 0.5% gain in October while 0.3% was expected further supporting the dollar. Attention shifts to the US inflation data and Industrial Production.
• The British pound fell against the dollar to a one month low at 1.5755 from 1.5931 on a heightened risk aversion in the market. Focus turns to the Labor Market data and November Inflation report where a dovish tone may signal additional quantitative easing.
• Oil prices edged higher hitting 99.80 dollars a barrel from 97.50. Gold rose yesterday to 1786.00 dollars an ounce from 1760.07 but today it dropped to 1762.71. Silver rose to 34.79 dollars an ounce from 33.73.

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