Look Out Below, Cyprus Edition

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Cyprus, according to the CIA factbook, is a former British colony with a population of 1,138,071 people, 77% of whom are Greek.

The tiny island nation rarely moves markets, but is at the center of today’s weakness, as fears that Cyprus could kick off of the next European crisis.

The Euro fell 1.1%, as the dollar rallied as monies poured into US Treasuries as a safe haven. European stocks slid on contagion fears. In Asia, markets were significant pressure. MSCI Asia Pacific Index (MXAP) sank 2%; Japan’s Nikkei 225 dropped 2.7% (biggest decline in 10 months). Even Australia’s S&P/ASX 200 Index got hit for 2.1%.

Gold advanced past $1600 for the first time in 2 weeks.

How significant is the Cyprus story to markets? Over the long haul, probably not much, but as of 5am this morning, the first 6 most popular stories on Bloomberg.com are all Cyprus related.



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