As Greece once more dominates the headlines, the European equity markets experienced a heavy sell-off. The CAC, DAX IBEX and the Italian equity benchmark index plunged sharply between 1.4% and 2.5%, while the London equity benchmark managed to report just a small decline of 0.45%.
Despite the ongoing uncertainty, the euro held above 1.13 against the US dollar, supported by stronger than expected European economic data. Eurozone’s Sentix investor confidence surged to 12.4 in February from 0.9 in January beating analysts’ expectations of 3.0, while German exports climbed 3.4% in December beating analysts’ expectations of a more modest 1% rise.
Precious metal prices extended gains and climbed higher in today’s session, acting as safe-haven. Gold climbed over 0.5% to retest $1240/ounce, while silver surged over 2.2% trading above $17. Base metal prices traded fairly mixed while copper rebounded towards $5,700 and ali breached above $1880. Crude oil prices continued their strong upside rally as WTI front month futures rose near 3% trading above $53 per barrel.
As all eyes are turning to the upcoming extraordinary Eurogroup meeting on Wednesday, we could expect high volatility across equity and commodity markets as European leaders are likely to urge governments to do all they can in order to prevent the Greek debt crisis from escalating and getting out of control.