Continued growth conerns in Asia and Europe

Growth concerns continue to weigh on the markets in Asia and Europe. The Shanghai index fell another 1.4% to the lowest since mid Jan. Taiwan and Hong Kong stocks fell to the lowest since early to mid Feb and the Indian Sensex index is just shy of the lowest since late Jan. European stocks are being dragged down by the banks as the European bank stock index is falling to a 3 week low and iTRAXX financial CDS index is at a 3 week high. The Spanish IBEX market is down for an 8th straight day to the lowest since late Nov. Yields are higher in both Spain and Italy with the Italian 10 yr yield in particular at a 4 week high after they sold 5 yr and 10 yr notes. With most of the buying lately in Spanish and Italian bonds being domestically driven (mostly banks), after the LTRO money gets spent who will be the marginal buyer? Euro zone Economic Confidence in Mar was little changed with Feb as expected. The German economy continues to be the bright spot after a seeing a bigger than expected drop in the number of unemployed in Mar and a rate of 6.7%, the lowest since the reunification.

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