Moody affirms investment grade rating for Spain
City Index October 17, 2012 2:00 PM
<p>The big story overnight came from the credit rating agency Moody who affirmed Spain’s Baa3 investment grade rating with a negative outlook. Both the rating […]</p>
The big story overnight came from the credit rating agency Moody who affirmed Spain’s Baa3 investment grade rating with a negative outlook. Both the rating and outlook now mirrors that of Standard and Poor’s. There has been increasing pressure and expectation over the last few weeks and particularly leading up to this week’s EU summit for Rajoy to officially request financial aid, and officials have suggested the most likely move will involve a precautionary credit line. Moody have said their rating decision reflects the potential intervention into the Spanish sovereign debt market by the ECB. In a statement they confirmed “the combination of euro area and ECB support and the Spanish government’s own efforts should allow the government to maintain capital market access at reasonable rates, providing it with the time it needs to stabilise public debt over the next few years.” The euro has rallied to a one-month high amid growing expectation for the EU summit, and Spanish 10-year bond yields reaching six-month lows.
This morning on the data front, we will see the release of UK labour data as well as MPC meeting minutes. The general consensus is for the MPC to have voted unanimously to maintain current monetary stance. August unemployment is expected to remain unchanged at 8.1%.
9.30am – Claimant Count Change
9.30am – MPC Meeting Minutes
9.30am – Unemployment Rate
1.30pm – US Building Permits exp 0.81m
1.30pm - US Housing Starts exp 0.77m
EUR/USD has comfortably broken and held the 1.3100 figure this morning and the next levels to watch are the overnight highs 1.3125 and then 1.3150 which is a resistance level. Downside support at 1.3050 and then 1.2990.
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