Markets to react shortly to Sarkozy-Merkel proposals

Markets will give their verdict today on proposals from the French and German leaders for the future of the eurozone.

President Nicolas Sarkozy and Chancellor Angela Merkel have demanded that eurozone nations exert "a collective control" of economic policy.

They also said member states should adopt balanced budget laws by the middle of next year in order to stabilise their strained public finances.

The euro fell in overnight trading, with experts predicting more downward pressure once european markets open this morning.

Markets expert Rory Gillen from Investorcentre.com said there did not appear to be a short-term solution to the difficulties facing the markets.

"Investors should continue to expect volatility," he said.