Swiss stocks slid from a four-month high as Spanish bond yields jumped to Euro-era highs, escalating concerns that the Eurozone debt crisis is worsening.
According to the official figures released by the Office for National Statistics on Friday, the U.K. public sector net borrowing rose more than expected to 14.4 billion pounds in June, which was 0.5 billion pounds higher than in June 2011. This raises concerns whether the U.K. will be able to meet its deficit reduction target this year.
U.S. ten-year Treasuries advanced, pushing yields to historic lows, as fears about Spain's ability to avert a sovereign bailout spark investors' demand for safe-haven fixed income assets. Ten-year yields touched 1.4347 percent, while the five-year yield fell to historic low of 0.5555 percent.
Eurozone finance ministers formally approved an agreement to loan up 100 billion euros to Spain for banks recapitalization in order to avoid a full sovereign bailout for the country.
Japanese stocks extended losses on Friday, due to disappointing news coming from the U.S. A stronger Yen is also one of the main reasons for the weakness in the stock market.
Swiss exports rose by 1.8% to CHF 16.9 billion in June, as demand for watches and chemical products increased, the Federal Customs Office said. The county's trade surplus narrowed to CHF 2.2 billion, from CHF 2.5 billion in May.
Retail sales edged up slightly by just 0.1% in June from the previous month, with one of the main reason for this being lower clothing and footwear prices, said the Office for National Statistics. The figure was against economists' expectations, who forecasted a 0.6% rise.
A number of U.S. unemployment claims surged sharply last week, rising by 34 000 to 386 000, which was well ahead of economists' expectations of 365 000 claims. The jump followed a decline of 24 000 the previous week and was the biggest gain since April 2011.
The Euro bloc's current account recorded a surplus of 10.9 billion euros in May. This reflected surpluses in the trade of goods, services and income from the previous month, whereas the deficit in current transfers rose slightly during the same period of time.
Japanese stocks advanced after the U.S. housing starts rose to the highest level since 2008, supporting Asian exporters earnings outlook. However, gains may be limited, due to the Yen's strengthening versus most of major counterparts.
The ZEW Indicator of Economic Sentiment has somewhat increased by 0.9 points to minus 42.5 in July, indicating a slight improvement of economic expectations for Switzerland, according to data released by the Center for Economic Research.
The jobless rate in the U.K. fell in May as the Olympics have created jobs, signalling a slight improvement in the recession-hit economy. According to the Office for National Statistics, the unemployment rate fell to 8.1%, while the number of people seeking unemployment benefits somewhat rose in June due to a change in benefit rules.
Housing starts jumped 6.9% to annual amount of 760 000 in June, the highest level since October 2008, reported the Commerce Department.
Spain will sell 3 billion euros of debt on 19 July, as Mariano Rajoy's, Spanish Prime Minister, government is struggling to keep access to capital markets to ensure financing of the Eurozone's third-largest budget deficit. Spain will auction short-dated bonds maturing in 2014, 2017 and 2019.
The Bank of Japan decided to scrap 0.1% yield floor for buying government bonds with maturities of one year and less, seeking to support slowing demand in the funding operations.
Most Swiss Stocks advanced as Fed Chairman Ben Bernanke delivered his testimony to Congress, with market players speculating that Bernanke will indicate further asset purchase programme.
U.K. inflation unexpectedly slowed to its lowest level since November 2009, due to a fall of clothing prices.
The U.S. growth is slowing due to diminished business investment in response to the Eurozone debt crisis and potential fiscal tightening in the US. Moreover, the Fed predicts slow progress in curtailing unemployment, reiterating that the central bank is prepared to undertake further decisive measures to stimulate recovery.
The ZEW Indicator of Economic Sentiment fell 2.7 points to minus 19.6 in July, indicating the third decrease in a row. This is due to the Eurozone sovereign debt crisis and slowing global demand that contributed to a gloomy investors' outlook.
The Nikkei 225 Stock Average (NKY) climbed as the IMF raised Japan's growth forecast to 2.4%. However, gains were limited due to unexpected decline of US retail sales and the Yen strengthening against the US Dollar to one-month high. The Nikkei 225 gained 0.6% to 8,779.32.
The Swiss stock market ended Monday with a moderate gain, fluctuating in a 30 point trading range during the day.
The UK stocks declined on Monday, as the IMF cut its outlook for the global economic growth to 3.5% for this year and for next year to 3.9%.
Retail sales surprisingly declined 0.5% for a third consecutive month in June, due to limited employment gains. The Commerce Department figures exceeded the most pessimistic estimations and prompted economists to cut their economic growth forecasts for the Q2.
According to Eurostat, consumer inflation in Eurozone remained unchanged 2.4% in June from the previous month, matching the preliminary estimates. This is due to a sharp decline in energy prices by 1.7%.