Oil and safe-haven government bond prices rose and the dollar eased today as investors fretted the war in Iraq could drag on.
Gold rose and European stocks looked set to open weaker with fears growing the war could be more costly in human and financial terms than expected.
Oil prices rose on supply concerns and after US President George W. Bush cautioned against expecting a quick victory.
The Washington Posttoday quoted unnamed senior US defence officials as saying the war was likely to last for months and would require more combat power than that on hand.
Oil prices rose on fears about lengthy stoppages to supply from Iraq and from Nigeria, where civil unrest has cut crude output by 40 per cent.
The euro was up nearly a quarter per cent against the dollar and close to its highest since the war began at around $1.07. The dollar was at about 120 yen.
Prices of risk-free euro zone government debt rose.
The yield on the two-year German Schatz note, which moves inversely to the price, was down 4.3 basis points at 2.54 per cent. The benchmark 10-year German Bund was yielding 4.17 per cent, down 3.3 basis points.
European stocks were set to open slightly weaker, after a slight dip on Wall Street with investors anxious about the uncertain outlook for the world economy and corporate profitability against the backdrop of war.
The blue chip Dow Jones Industrial average fell 0.61 per cent and the tech-laden Nasdaq Composite closed down 0.26 per cent.