The Euro zone economy contracted by 0.3pct in the December quarter but annual growth still stands at 0.7pct. The French economy grew by 0.2pct but Germany fell by 0.2pct with Spain down by 0.3pct and Italy down by 0.7pct.

US chain store sales were up by 3.0pct in the latest week compared with a year ago according to the Johnson Redbook Retail Sales Index.

European shares slumped on Tuesday in what investors described as a long-awaited correction after a three-month rally. At the heart of the concerns were worries that Greece would be able to secure a private sector debt restructuring deal by the Thursday deadline. The benchmark FTSEurofirst 300 index fell by 2.4pct with the UK FTSE down 1.9pct while the German Dax lost 3.4pct.

US sharemarkets fell sharply on Tuesday as investors across the globe reduced exposure to equities and commodities. Financials and basic material stocks were hardest hit. At the close of trade, the Dow Jones index was lower by 204pts or 1.6pct. The S&P 500 fell by 1.5pct and the Nasdaq lost 40pts or 1.4pct.

US treasuries rose on Tuesday (yields lower) as investors flocked to ´´safe haven´´ assets such as government bonds. The Federal Reserve bought $4.027 billion of Treasuries maturing May 2018 through November 2019 as part of the Operation Twist program. Further purchases of long-dated Treasuries are planned for Wednesday and Thursday and it will sell short-dated securities on Friday. US 2yr yields fell by 2pts to 0.28pct and US 10yr yields fell by 7pts to 1.95pct.

The Euro and commodity currencies fell against the greenback in European and US trade on Tuesday. The Euro fell from highs near US$1.3210 to around US$1.3100, and was near US$1.3115 in late US trade. The Aussie dollar eased from highs around US106.35c to near US105.25c, and was close to US105.55c in late US trade. But the Japanese yen lifted from 81.49 yen per US dollar to JPY80.57 and was near JPY80.84 in late US trade.

Benchmark crude oil prices fell in line with other commodities as investors adjusted positions ahead of the Greek debt deadline on Thursday. US Nymex fell by US$2.02 or 1.9pct to US$104.70 a barrel while London Brent crude lost US$1.82 to US$121.98 a barrel.

Base metal prices slumped on Tuesday as investors retreated from ´´risky´´ assets such as equities and commodities. Metals fell up to 3.7pct with lead faring worst while nickel held up best, down by 1.7pct. The gold price also fell sharply in line with other commodities with the April Comex gold price lower by US$31.80 or 1.9pct to US$1,672.10 an ounce.

Ahead: In Australia, the National Accounts is released, containing the latest economic growth data. Reserve Bank Deputy Governor Lowe has just delivered a speech. In the US, the ADP National Employment index is released together with consumer credit.