Concern about plans for a fundamental review of the bail-outs given to Europe's high debtors hit European stocks today and drove up the bond yields of troubled euro zone economies.
The euro itself rebounded from recent sharp losses. Commodity prices firmed, bouncing back from their biggest weekly drop since 2008 as the dollar eased back.
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The focus in Europe was on the implications of Friday's unusual and secretive meeting of selected financial officials who discussed the need for new adjustments to Greece's aid programme.
It was not clear to what extent such a move would also trigger adjustments to similar repayment plans for Ireland and Portugal. Rumours about a full-on restructuring of Greek debt have concerned European markets for several weeks now.
Yields on Greek and Portuguese debt rose, with five-year Greek paper offering around 22%. The cost of insuring Greek, Irish and Portuguese debt against default also rose, with investors increasingly concerned that Greece may have to dilute its repayment terms for private bondholders.
The euro recovered a bit from last week's steep drop, which was brought on both by an apparent delay in the European Central Bank's next rate rise move and by dollar-boosting US jobs data, which came in stronger than expected on Friday.
The rebound in various commodity prices after their rout last week also helped to pull up the euro from a three-week low.
Brent crude futures rose more than $3 as the dollar weakened and some traders and investors went bargain hunting after last week's sell-off. Spot gold prices rose 0.8%, following its biggest weekly loss since the first quarter of 2009. Silver, copper and wheat also rose.
