The ongoing recession has metal producer like Teck Resources (NYSE:TCK), BHP Billiton (NYSE:BHP) and Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) down today, as the dollar strengthened, lowering the appeal of commodities.
Concerns over the continuing sovereign debt crisis in Europe is the major impetus behind this, as the focus goes back on the EU after being given a free ride in the press for some time.
Confirming what we and others commented on concerning the pathetic "stress tests" which made it appear the sovereign debt holdings were in better shape than they actually were for European banks, now they are again under pressure as the real story of their condition has yet to accurately be told, and we can almost be certain they'll be far weaker than thought.
Yield spreads for Germany and Greece were at their widest levels since May, and the gap between yields on 10-year German bonds and Portuguese and Irish debt are at the highest levels in history.
German bankers said Monday the ten largest lenders in the country may have to raise an additional $134 billion in new capital, underscoring their weakness.
Copper prices dropped on the news as demand issues were raised in light of the revelation things aren't as good as they were asserted in Europe.
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