Global equity and commodity prices enjoyed a steadier session after the previous day’s sharp sell-off, although the mood in the markets remained fragile as worries about the eurozone and China lingered.
The dollar eased back and Treasury bonds edged higher after tame inflation figures and weak housing data in the US appeared to reinforce the case for the Federal Reserve’s expansion of its quantitative easing (QE2) policy.
But uncertainty over how the Irish debt crisis would play out remained the chief thorn in the side of market participants. Ireland has agreed to work with the European Union and the International Monetary Fund to shore up its ailing banking sector, heightening expectations that Dublin will soon bow to eurozone pressure to accept some form of bail-out.