By Neelabh Chaturvedi
Oddly, well-telegraphed events continue to rattle markets.
This Thursday the European Central Bank’s extraordinary €442 billion 12-month liquidity facility expires. That’s been known for some time, but that hasn’t stopped investors from getting skittish as the day approaches. German bunds are rallying, stocks are selling off and the euro is falling.
In addition, three-month Euribor, a key interbank lending rate, was set at 0.761% Tuesday, its highest level since Sept. 2009, and the yield on the U.S. 10-year Treasury fell below 3%, highlighting the nervousness in the market.
“Risk aversion is in the ascendancy. Concerns about the European banking system ahead of the expiration of the ECB 12-month liquidity facility on Thursday is weighing on the market. Fears of a faltering Chinese economy are also creating negative sentiment,” said Markit’s Gavin Nolan.
clipped from blogs.wsj.com
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