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Standard and Poor's downgraded its unsolicited ratings on Italy by one notch to A/A-1 and kept its outlook on negative, a major surprise that threatens to add to concerns of contagion in the debt-stressed euro zone.
S&P in a release dated Sept. 19 said the cut reflected its view of Italy's weakening economic growth prospects.
"In our opinion, the measures included in and the implementation timeline of Italy's National Reform Plan will likely do little to boost Italy's economic performance, particularly against the backdrop of tightening financial conditions and the government's fiscal austerity program," said S&P.
The move from S&P came as a surprise as the market had thought Moody's was more likely to downgrade Italy first.
Originally posted by Agent_USA_Supporter
reply to post by Vitchilo
Hey Vitchilo so why are the stock postive today?
Spain announced it raised €4.46 billion in 12-18 month bonds, with a target raise of €3.5-4.5 billion.
12-mo auc avg yld 3.591% vs 3.335%, bid/cover 2.78 vs 2.14
18-mo auc avg yld 3.807% vs 3.592%, bid/cover 2.74 vs 3.23
Greece announced €1.625 billion 3M Bill auction results, in line with prior:
3-mo auc avg yld 4.56% vs 4.50%, bid/cover 2.84 vs 2.95
And this is why everyone is ignoring the far more important and bigger Chinese news overnight... At least for the next few hours as the short covering relief rally fades away.
Nine banks failed July's stress tests and 16 others only barely passed. Those banks have to submit plans on how the want to raise their capital buffers to the EU's banking regulator by mid-October. They then have several months to try to raise the money on the market or seek aid from their governments.
EU official: More banks may need recapitalization
Stock futures are rising as investors divide their attention between Europe's precarious debt situation and a key Federal Reserve meeting.
Late Monday, ratings agency Standard & Poor's cut Italy's credit rating by one notch, citing the country's growing debt and weak growth outlook. Italy has the second-biggest debt burden among countries that use the euro, after Greece.
The Fed begins a two-day policy meeting Tuesday. Many investors hope the central bank will announce it is taking steps to stimulate the U.S. economy after the meeting ends.
Originally posted by Shenon
reply to post by Vitchilo
He is probably gonna say that it is decided that the FED...*wait for it*...will decide at the next Meeting if more Stimulus is needed
Well, as expected, the Chinese news finally filtered through to the vacuum tubes. It took them a few hours... But it is finally there. BNP is down 7.3% at last check and tumbling. Comments from the IMF, which is always behind the curve, are not helping.
BNP down 25% since Thursday highs.
We have been pointing to the incessant rise in the risk of the Financial Stability Board's most systemically important entities for weeks now. It appears the European Systemic Risk Board has, according to Dow Jones, issued its first warning to governments, urging them to prepare capital injections for some European banks.