The Libor financial scandal dubbed Liborgate by this business media source took another turn, revealing that the rate-fixing affair may be larger and more widespread than first thought, with court documents revealing the timidity of regulatory officials.

Asian stocks suffered a third consecutive day of declines as sluggish consumer confidence and Spanish debt continued to worry markets.

Yesterday the European Commission index on consumer confidence was published which showed a drop to -21.6 for July from -19.8 in June. This was lower than the forecasted -20.0 reading and puts the consumer confidence index is at its lowest level since August 2009.

Yesterday also saw the Murcia province became the latest government region in Spain to join Valencia in requesting financial assistance from Madrid. Eurozone policymakers only last week organized 100 billion euros in rescue funding for Spain to support its banking sector and regional governments, yet concerns remain that Spain will require a sovereign bailout. The yield on the Spanish 10 year bonds approached 7.50% yesterday, well above the 7% threshold regarded as unsustainable by the markets. This sent investors flocking to safe haven currencies like the yen and the USD, selling off stocks in the process. During Asian trading on Tuesday, Australia’s S&P/ASX200 declined 0.05%, whilst Japan’s Nikkei 225 Index fell 0.13%. Hong Kong markets were closed due to a typhoon ravishing the island.

The doom and gloom surrounding the Eurozone was compounded by Moody’s the credit ratings agency warning the top 3 rated Eurozone economies – Germany, Netherlands and Luxembourg that their outlook is negative. This has been interoperated by many as the first step to losing their AAA rating as seen in France and Austria earlier this year. This was enough to send the Euro down to a 12 year low against the JPY with IMF and European officials arriving in Greece Today to assess its progress in reducing its debts and determine whether or not Greece will receive 31.5 billion euros of loans in September.

Today, the focus is staying with the Euro as the eurozone is set to release preliminary data on manufacturing and service-sector activity and Germany and France to publish their own individual reports. Later in the day expect increased volatility when Fed Chairman Ben Bernanke is due to speak and retail sales figures are published in Canada.

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