Global stocks and the euro eased on Friday after the Spanish economic dynamo of Catalonia said it needed help to refinance its debt, adding to financial troubles in Spain, which is already weighed down by a capital-constrained banking sector.
A weaker euro and weaker equity markets had weighed on the base metal complex. Oil futures rose more than 1% Friday, as escalating hostilities between Israel and Palestinian militants renewed fears about a broader conflict that would disrupt supplies of Mideast crude oil.
The euro plumbed a fresh 22-month low against the U.S. dollar after the president of Catalonia, Spain's wealthiest autonomous region, said it is running out of options for refinancing more than 13 billion euro in debt that comes due this year.
The euro fell below $1.25 on trading platform EBS, and equity markets on Wall Street opened lower, following retreating European stock markets.
News of Catalonia's troubles came as Spain's Bankia SA (BKIA.MC) is set to ask the state for a bailout valued at more than 15 billion euros ($19 billion), marking another rise in the cost of rescuing the country's fourth-biggest bank.
Markets already were skittish over a possible Greek exit from the euro zone, halting a brief equity rally following sharp losses earlier in the week. Bonds prices rose in a bid for safety as investors prepare for what is likely to be volatile trading over the coming month.
Traders said the outlook is negative.
"Europe is in a recession, China is slowing down and the United States is slowing down as well," said Michel Juvet, chief investment officer at Swiss bank Bordier & Cie.
On Wall Street, the Dow Jones industrial average .DJI was down 26.33 points, or 0.21 percent, at 12,503.42. The Standard & Poor's 500 Index .SPX was up 0.03 point, or 0.00 percent, at 1,320.71. The Nasdaq Composite Index .IXIC was up 0.87 point, or 0.03 percent, at 2,840.25.
In Europe, the FTSEurofirst 300 index .FTEU3 was down 0.2 percent at around 980, not far from its May 21 trough of 952.55 points, its lowest point since December 20.
MSCI's all-country world equity index .MIWD00000PUS fell 0.4 percent to 300.46.
The U.S. Dollar Index .DXY off 0.04 percent at 82.313. The euro was down 0.11 percent at $1.2521. Against the Japanese yen, the dollar was unchanged at 79.56 yen.
The benchmark 10-year U.S. Treasury note was up 10/32 in price to yield 1.75 percent.
Brent crude oil prices gained, supported by a lack of progress in talks with Iran over its nuclear program, returning investor focus to fears over supply if tension over the issue intensifies.
Brent crude rose 32 cents to $106.87 a barrel.
U.S. light sweet crude oil rose 7 cents to $90.85.
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