International markets were smashed overnight as risk-aversion soared around the globe.

Soaring Italian bonds yield spooked the market, after Berlusconi's promise to resign failed to placate investors who remain unconvinced the country will be able to deliver on economic reforms.

Talks in Greece regarding the proposed power sharing agreement broke down, with a meeting between top-level political leaders concluding without a new prime minister being named.

In Europe, the FTSE slumped 107 points (-1.9%), whilst the CAC (-2.2%) and DAX (-2.2%) suffered heavier falls.

Stateside, the Dow Jones slipped 389 points (-3.2%) to settle at 11781, whilst the broader S&P 500 shed 3.7% and the tech-heavy Nasdaq gave up 3.9%.

The Aussie dollar retreated overnight, sliding to a two-week low against the yen and greenback as investors retreated from risk.

The euro slid more than 3 cents to a one-month low against the US dollar as Italian bond yield climbed above 7% – the level at which Greece, Ireland and Portugal sought bailouts.

Oil retreated for the first time in six sessions, shedding US$1.06 to settle at US$95.74 a barrel, whilst the gold also lost ground.

Today's session will bring us data in the form of the employment change and unemployment rate, with the numbers slated for release at 11:30am, AEDT.

The market will also be in receipt of Chinese trade balance data today, which could have an impact on the local action.

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Morning Market Analysis: PIIGs Slayed is a post from: Australian Stock Report Market Pulse Blog