Markets fell on Monday amid growing concern that Greece will exit the European currency union. The MSCI All-Country World Index fell 1.6 percent. The euro depreciated 0.6 percent against the US dollar and 0.7 percent versus the yen. The yield on the Spanish 10-year note rose 22 basis points to 6.23 percent while Italy’s 10-year yield increased 19 basis points to 5.70 percent. Copper futures fell 2.6 percent while New York oil futures dropped 1.4 percent.
Weak European economic data on Monday added to the negative sentiment. Industrial production in the euro area fell 0.3 percent in March. A strong 1.3 percent increase in industrial output in Germany was not able to fully offset large decreases elsewhere, particularly the 1.8 percent decline in Spain and the 0.9 percent decline in France.
And the eurozone economy could weaken further as the financial crisis continues to wreak havoc on credit ratings. On Monday, Moody's cut the credit ratings of 26 Italian banks, citing weakened earnings and the country’s economic outlook.