July 09 - The euro hovers near a two-year low and world shares fall as the darkening global growth outlook combined with low hopes of progress in Europe's debt crisis drive investors away from risk assets. Jamie McGeever reports
European markets a sea of red - as global growth slows, and Europe continues to squabble over how to solve the crisis. Spanish bond yields rose more than 10 basis points today, back above the key 7 percent mark. That came hot on the heels of last week's jump of some 65 basis points, the second biggest weekly rise since the euro was launched back in 1999. On the foreign exchange markets, the euro fell to its lowest in two years against the US dollar, and weakest point in almost 4 years against the British pound. So far, the euro selling has been pretty orderly. But more weakness could be in store if euro zone finance ministers meeting in Brussels fail to make tangible progress, so says Steve Saywell, Head of European FX Strategy at BNP Paribas. (SOUNDBITE) STEVE SAYWELL, HEAD OF EUROPEAN FX STRATEGY, BNP PARIBAS (SAYING): "What we need to see tonight are two key things: the terms of the bailout, or shall we call it the capital injection to the Spanish banks. But also some more details about the summit, specifically the conditions attached to ESM purchases in the secondary market, the secondary bond market, for euro zone government debt. And how this Finnish and Dutch opposition to this plan is going to come out." Against that backdrop of uncertainty, European stocks were lower too. The benchmark European FTSE Eurofirst 300 index lost around a quarter of one percent, while Britain's FTSE was off around a third of one percent. Jamie McGeever, for Reuters.