The sentiment from Friday's poor U.S. and Canadian employment reports is carrying over, said Christian Lawrence, rates and FX strategist at RBC Capital Markets.

"Appetite for risk was nowhere to be seen across global markets at the start of this week in the wake of dismal data releases on Friday," Lawrence said.

The Euro Stoxx 50 down is 22 points, or 1.1%, to 2137, the UK FTSE 100 down 19 points to 4430 and the German DAX is down 11 points to 4773.

The Australian dollar is the weakest performing major currency. The U.S. dollar and euro have each gained more than three cents against the Aussie.

The U.S. dollar and yen are broadly outperforming on the foreign exchange market. The Canadian dollar is down 0.0115 to 0.8358 against the U.S. dollar (1.1970 USD/CAD) and down 1.05 to 75.21 against the yen.

The U.S. dollar is down 0.38 to 90.02 against the yen and the Dollar Index is up 0.363 to 83.026.

The euro is down 0.0092 to 1.3381 against the U.S. dollar, up 0.0044 to 1.6022 against the Canadian dollar, up 0.0094 to 0.8980 against the pound sterling and is lower by 1.31 to 120.47 against the yen.

The pound sterling is down 0.0259 to 1.4904 against the U.S. dollar and down 0.0133 to 1.7840 against the Canadian dollar.

IMF Managing Director Strauss-Kahn fuelled world-wide growth concerns when he said the IMF may have to revise down its growth forecasts for 2009 in an interview with Bloomberg. He also said that Europe is "behind the curve" regarding stimulus packages, and that governments are underestimating how much such measures are needed to help economies recover.

Commodity markets are slumping with WTI crude oil down $2.38 to $38.45. The front month gold contract at the Chicago Board of Trade is down $25.70 to $829.00 per ounce - the lowest since Dec. 15.

Despite the broad economic concerns, U.S. equity futures are only pointing to modest losses. U.S. equity market futures are mixed with contracts on the Dow Jones industrial average down three points to 8520, the S&P 500 down one point to 885 and the Nasdaq up one point to 1223.

In fixed income, U.S. two-year yields are up 0.8 bps to 0.75%, with five-year yields up 3.9 bps to 1.55%, 10-year yields up 4.2 bps to 2.43% and 30-year yields up 3.9 bps to 3.10%. The Eurodollar March 09 contract is up 4.0 ticks to 99.16. The yield curve is steeper, with the 10/2-year spread up 3.5 bps to 167.58 bps.

Yields on two-year Canadian government bonds are up 0.9 bps to 1.11%, with five-year yields up 3.4 bps to 1.80%, 10-year yields up 2.4 bps to 2.83% and 30-year yields up 1.2 bps to 3.64%.

In Germany, returns on two-year German bonds are up 4.4 bps to 1.56%, with five-year yields up 4.1 bps to 2.31%, 10-year yields up 2.8 bps to 3.05% and 30-year yields up 5.4 bps to 3.78%.

Yields on UK two-year bonds are up 1.2 bps to 1.62%, with five-year yields up 4.6 bps to 2.73%, 10-year yields up 4.8 bps to 3.18% and 30-year yields up 4.5 bps to 3.90%.

All data taken at 8:50 a.m. EST.

By Adam Button, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Nancy Girgis, This email address is being protected from spam bots, you need Javascript enabled to view it

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