MORNING BRIEFING: Moody’s puts Spain’s credit rating on review for possible downgrade

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MORNING BRIEFING:  Moody’s puts Spain’s credit rating on review for possible downgrade

What’s new:
United States: Upbeat data and higher yields support the USD
Euro Zone: Yesterday’s Spanish debt auction comes at a higher cost
S&P: Revises outlook in Belgium from stable to negative
Moody’s: Puts Spain’s credit rating on review for a possible downgrade
Asia: Japanese manufacturers’ sentiment worsens

Today:



Rates in Asia and Indices:
EURUSD: 1.3382 - 1.3290.
USDCHF: 0.9644 – 0.9593.
GBPUSD: 1.5775- 1.5713.
EURJPY: 112.08 – 111.44.
USDJPY: 83.96 – 83.61.
DowJones: 11’476.54 +0.42%
NASDAQ:  2’627.72 +0.11%
S & P 500: 1’241.59 +0.09%
Nikkei: 10’309.78 -0.07%
Shanghai: 2’911.41 -0.54%
Gold: $ 1'390.70
Crude Oil: $ 87.74

Comments:

Upbeat US economic data released yesterday, and the Fed’s statement accompanying the FOMC interest rate decision which confirmed their previous decision to proceed with the USD600 billion bond buying program to support the economy – pushed US equities to higher ground.

The US Dollar was supported by the better than expected data and the higher yields after the FOMC rate decision and statement were made public.

In the Euro Zone yesterday, a Spanish bill auction that came at a higher cost for the issuer; and mixed data from the German Zew survey weighed on the single currency. Even rating agencies helped to cloud the Euro’s outlook - with Standard & Poor’s revising its outlook on Belgium from stable to negative yesterday, and Moody’s warning this morning that it was putting Spain’s credit rating on review for a possible downgrade. Moody’s warning comes a day ahead of Spain’s second auction this week.

In Asia, the BoJ’s tankan survey dampened the enthusiasm at US close as it showed sentiment among Japanese manufacturers in fact worsened, despite it came out better than consensus.

Good day,

Rudolf Muscat
Trading desk

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