Forex News: Investors preferred Bonds than Shares

Unpleasant surprises in international markets reserved for the last month of summer, as there were strong concerns about a new recession of the U.S economy with all the consequences that would follow. European stocks suffered the worst monthly decline since May as the FTSEurofirst 300 index to lose during the last month about 2% of its value, while to the other side of the Atlantic the Dow index recorded a loss of around 4% showing the largest decline – during any August month – since August 2001. Losses of more than 4% were recorded to the S&P 500.

Tokyo’s Nikkei index dropped by 7.5% during August, while an overall assessment of the MSCI World shares Index indicate the worst monthly performance in over three months, with losses of 4.1%. Under pressure was also the crude market, which expanded its losses in August to 6.5%, recording the biggest monthly decline since May. Concerns about the state of the global economy dominated yesterday the stock markets, as the Nikkei index in Tokyo showing the biggest one-day drop in three months of 3.6% since the first attempt of the central bank of Japan to stop further rise of the yen.
Losses of more than 1% displayed as well in Europe during the early stock market sessions, but eventually – in the wake of positive data on U.S. consumer confidence and housing prices- markets closed with positive sign.

Good news for the U.S economy as the consumer confidence index strengthened in August while housing prices rose more than expected in June, providing a little breathing space to those who are worried about the state of the U.S. economy. In the foreign exchange market, the yen was once again near 15 years high against the dollar and the euro touched a record low against the Swiss franc. The sterling fell 2% against the Swiss franc, to the lowest levels in nine months.

The 10-year German yields of government bonds recorded a new low record while at the same time, Reuters survey showed that investors showed a preference for bonds in August, slightly reducing their investments in shares.