Fears of a global double dip recession led to stormy markets and squally trade yesterday with risky assets from all market areas losing value.

The day started off with the Shanghai Composite, China’s main stock exchange, tumbling to 14 month lows after the US Conference Board reclassified the way it measured Chinese performance. This lack of confidence spread like wildfire throughout the Asian markets and by the time Europe was waking up, an opening in the red was all but assured.

European issues continued the downward move. The market has realised, and as we pointed out yesterday morning, that the conclusion of an ECB liquidity operation is a cliff face that the EU, its constituent countries and European banks are hurtling towards. Should we see a large proportion of that liquidity being rolled into the new 3 month liquidity operation then these losses will continue. The results of this is due at 10.15 this morning and will shape trade today.

The coup de grace, the financial cherry on this poisonous knickerbocker glory was notification of US Consumer Confidence. As we predicted yesterday it was horrific, 52.9 vs an expected figure of 62.5. Once again equity markets and risky assets fell with the FTSE finishing 3.1% lower while the Dow Jones fell 2.6% and Germany’s DAX 3.33%.

The global proxy for risk in the currency arena is of course the euro and the single currency was sold hard by traders as they ran for the hills. EURUSD fell from the 1.23s to a low of 1.2152 while GBPEUR hit 1.2393, a level not seen since November 2008. The euro has recovered a little bit overnight but still looks uncomfortable.

We were due to have UK GDP data out today but we have heard from the ONS in the pst 24 hours that they are delaying that and the publication of the UK current account and the balance of payments until July 12^th. This is apparently down to a calculation error.

Apart from that ECB auction result we will be focusing on German unemployment at 08.55 and US ADP at 13.15.