Volatile trading was seen yesterday. Although DJIA's plunge of almost -1000 points at one stage was later claimed to be due to trader error, risk sentiment in general deteriorated further as ECB refrained from offering further accommodative measures to ease concerns about sovereign crisis. EURUSD slumped to as low as 1.2526 before closing at 1.2656, down -1.2%. Stock markets tumbled with DJIA and S&P 500 each losing -3.2%. Shares in Europe were a tad lower with FTSE 100, DAX and CAC 40 losing -1.5%, -0.8% and -2.2% respectively. Bond yields in Greece, Spain and Portugal rose further.

Weakness in stock markets and strength in USD triggered further selloff in crude oil. The front-month contract for WTI crude slumped to 74.58, the lowest level since February 16, before closing at 77.11, down -3.58%. While price stages a rebound today, a weekly loss of more than +5% is inevitable.

Sovereign crisis in Greece and contagion fear remained under the spotlight. At the ECB meeting, policymakers left the main refinancing rate unchanged at 1% as 'broadly balanced' risks to growth suggested current interest rates were 'appropriate'. When asked if the central bank would buy government bonds, President Trichet said the members did not discuss about purchases of government bonds but called for 'decisive actions by governments to achieving a lasting and credible consolidation of public finances'.

While Trichet reiterated Greece is an extreme case of fiscal deficit problem and stressed that Portugal and Spain are not Greece, the market was obviously not satisfied with the comments and inactions of the ECB.

Speech made by St. Louis Federal Reserve Bank President James Bullard exacerbated market sentiment as he said one risk to the outlook of US recovery is 'the fallout from potential sovereign debt default as conditions continue to deteriorate in Greece and other countries'.

Gold price surged above 1200 (intra-day high: 1211.9) as sovereign crisis woes drove investors to safe haven assets. While profit-taking is imminent after the strong rally, the pullback will likely be brief. Gold has the ability to move higher as long as default risks in Greece and peripheral European economies remain.

Dataflow did not catch much attention but it was rather mixed. In Germany, factory orders rose +5% m/m (consensus: +1.4%) in March from a flat reading in February. On annual basis, orders soared +26.1%, compared with market expectations of +21%. Initial jobless claims in the US, however, slid to -4K to 444K in the week ended May 1, while the market had anticipated a bigger drop to 440K.

UK's general election ended Thursday. While the final result is yet to know, exit polls suggest that the Conservative Party will win the most seats but fall short of an overall majority.