Worries About Europe’s Debt Crisis Grow:
Greek default possible, contagion spreads to Spain and Italy.
European major averages fell Tuesday as fears ripped through markets that Italy and Spain would need new funding to solve their fiscal problems. New headlines coming out of Europe are considering the consequences of a Greek default and are straying away from absolute claims that this will not occur.
European equities fell sharply on worries that Italy and Spain would need help from the private sector to help save their debt problems. Italy is expected to pass sweeping austerity measures to help balance long term problems related to spending.
We told our readers to watch the dollar and yesterday was a good reason to look for price action versus the euro as the third and fourth largest nations of the 17 countries that use the euro get more attention from traders. Who will be next? Will attention go back to Ireland, which has already received funding but is still suffering poor economic growth? Are there more possible contagion effects? Volatility and the magnitude of price action may give more insights over the next few days.