The Organisation of Economic Co-operation and Development (OECD) said its May leading index for 33 member nations had fallen for a second straight month, down from 102.8 to 102.5.

The European debt crisis reached a new flash point on Monday with EU member countries and the European Central Bank divided on proposals for a bail-out of Greece while Italian bond yields soared and shares sank on concerns about the progression of a budget austerity plan.

[Kick off your day with Global Markets Daily]

European shares slumped on Monday in response to on-going developments in the region´s debt crisis, especially the risk that contagion could spread to Italy. The FTSEurofirst index fell by 1.5pct with the Italian share index down 4pct, the German Dax lower by 2.3pct and the UK FTSE down by 1.0pct.

US sharemarkets fell sharply on Monday. Investors were responding to the fresh developments in the European debt crisis and inflation data released in China on Saturday. Investors also further trimmed positions in response to Friday´s weak US jobs data. The Dow Jones fell by 151pts or 1.2pct after earlier being down as much as 186 points. The S&P 500 ended lower by 1.8pct and the Nasdaq lost 57pts or 2.0pct. After the bell shares in Alcoa rose 1pct after it reported earnings ahead of forecasts.

US treasuries rose sharply on Monday (yields lower) as investors switched their affections from riskier assets like equities and commodities to US government bonds. US 2yr yields fell by 4pts to 0.36pct and US 10yr yields fell by 11pts to 2.92pct.

Investors embraced the US dollar and Japanese yen at the expense of Euro and commodity currencies on Monday. The Euro fell from highs near US$1.4200 to near US$1.3985, before ending US trade at US$1.4030. The Aussie dollar fell from highs near US107.20c to US106.30c and ended US trade near US$1.0655. And the Japanese yen strengthened from 80.80 yen per US dollar to JPY80.10, and ended US trade near JPY80.25.

Benchmark crude oil prices fell again on Monday with the weak US jobs data, high Chinese inflation data and ongoing Euro debt woes raising the risk of weaker global oil demand. In addition Chinese oil imports fell in June. Nymex crude oil fell by US$1.05 to US$95.15 a barrel and London Brent crude fell by US$1.09 to US$117.24 a barrel.

Base metal prices fell on the London Metal Exchange on Monday as investors shifted from risky assets like equities and commodities to safe-haven assets like US government bonds and gold. Metals fell between 0.8-2.8pct. But the gold price rose with Comex gold up by US$7.60 an ounce or 0.5pct to US$1,549.20. In after-hours trade gold has lifted to US$1,554.10 an ounce

Ahead: In Australia, the NAB business survey is released together with credit and debit card lending figures. In the US, trade figures are released.

More from IBT Markets:
Subscribe to get this delivered to your inbox daily
Follow us on Facebook.
Follow us on Twitter.