The decision of Dubai World, a government investment company overseeing investments in Dubai to delay payment of most of its debt of about $59 bn , has rattled the financial markets. Credit Default Swaps linked to Gulf investments rose as much as 131 points today, and USD slumped to a 14 year low against the Yen. This is the first sovereign default after Argentina in 2001. The markets have been spooked by this data, and investors are demanding a higher returns from EM economies.
Elsewhere, oil was slightly down, and Gold touched new highs. Dollar was mostly sold across the board and GBP was sold off heavily.
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