EUROZONE

This week all eyes were on Greece. Investors were stunned at prime minister George Papandreou's announcement of a referendum, putting at stake the debt deal agreed by European leaders after tough negotiations. The news horrified political supporters and opponents alike and markets were confronted with the imminent threat of an disorderly Greek default and the collapse of the eurozone.European shares on the Euro Stoxx 50 plummeted by more than 10% compared to the high after the EU summit. As investors sought refuge in safe havens, 10-year German bund yields dropped by over 50 points during this period from almost 2.30 to 1.74%; at the same time, bond yields in the troubled eurozone countries soared. Yields on Greek government bonds roseparticularly dramatically: 2-year Greek bonds, for example, were trading at yields of over 100%.The forex markets followed the usual pattern: the dollar strengthened across the board, EUR-USD slipped temporarily to just over 1.36. However, the dollar's strength was additionally supported by massive intervention by Japanese monetary authorities to weaken the yen - the first time they had done so since August.