The euro flirted with the 1.30-level against the dollar, briefly tumbling below for the first time since April 2009. The single currency sold off on combination of persistent fears that the debt contagion will continue to spread throughout the Eurozone despite the unprecedented loan package to Greece. Lingering uncertainties over further spillover to Spain, Portugal and possibly Italy sent ripples through the global equity bourses with the European indexes selling off sharply. London's FTSE 100 tumbled by 2.6% while Paris' CAC 40 index plunged by over 3.6%. The US equity indexes were not immune to the heightened fears, with the Nasdaq shedding nearly 3% and the Dow Jones and S&P 500 tumbling by around 2%. Crude oil also fell sharply, relinquishing nearly 4% to trade beneath the $83-mark.

Markets largely ignored upbeat US economic reports, released earlier in the session and consisted of March factory orders - which improved by 1.3% and the March pending home sales report. On a monthly basis, pending home sales climbed higher in March by 5.3% compared with an upwardly revised 8.3% previously. Pending home sales, on a yearly basis, also posted a strong advance - it's strongest since October 2009 up 23.5%.

The calendar for Wednesday will be busy, including the first round of jobs data with the April Challenger job cuts at 7:30 AM, the ADP private sector payrolls due out at 8:15 AM, and the April non-manufacturing ISM index. The ADP private sector payrolls is expected to improve to its best level since January 2009 and post a gain of 28k jobs for April versus a loss of 23k jobs from March. Also worth noting tomorrow will be the April non-manufacturing ISM report, with the headline reading expected to creep up slightly higher to 57.0 from 56.5. It will be interesting to see whether the employment component will climb above the key 50-level, which differentiates between expansion and contraction, for the first time since December 2007. If the employment index of the non-manufacturing ISM improves sharply, it could bode well for Friday's labor report and stem the steep sell-off in US equities.

Also weighing on global equity and commodity prices was a report released overnight revealing China's manufacturing PMI expanding at its slowest pace in 6-months and possibility reflecting the government's efforts to tap the brakes on the economy. Meanwhile, the Reserve Bank of Australia tightened rates by 25-basis points to 4.5% but issued a less hawkish statement and suggesting that a pause in the tightening cycle may be forthcoming next month.