"With the debt debate stealing the headlines over the past week we can now get back to reality with genuine concern over the growth of the US economy triggering a mass sell-off. The Dow Jones dropped 2.2% on Tuesday as Consumer spending figures recorded their first fall in two years and global manufacturing data suggests that the large industrial economies of the world are close to stalling.
"Traders are struggling to understand how economies such as the US and Greece are going to pay back their debts with continued weak macroeconomic data and ‘growth' a key ingredient to any strategy.
"Interactive markets traders appear to have been well placed for the falls as the general consensus was that the brief relief rally in the US was a gilt edged shorting opportunity in equities.
"Gold once again appears to be the only safe house in town, reaching highs of $1668 per oz. In the current market climate $2000 gold will probably be with us sooner than you think.
"Italy and Spain are once more in the spotlight, with yields being pushed into the danger zone, adding fuel to mounting speculation that another Eurozone bailout is imminent.
"In the UK traders are struggling to find a good news story out there so further downside and testing of the 5500 level in the FTSE 100 may be on the cards.
"On the currency markets Sterling appears to be a safe haven against the Euro with two month highs being reached. This is also helped by better than expected service sector index numbers reducing concern over more QE by the Bank of England.
"In Switzerland the national bank has stepped in to avert continued strength in the franc causing some excitement in the market. The plan appears to be working with the currency trading sharply lower but how long this will last amidst continued Eurozone woes remains to be seen."
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