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Moody’s Put Spain’s Aa1 Rating On Downgrade Review, EURUSD Meets Gravity

Posted By admin On December 15, 2010 @ 6:02 am In Money Watch | Comments Disabled

Tyler Durden
Zero Hedge [1]
Dec 15, 2010

EURUSD kneejerk reaction on Moody’s announcement shows a downward acceleration of 9.8 m/s2:

Moodys Put Spains Aa1 Rating On Downgrade Review, EURUSD Meets Gravity EURUSD%2012.15 0 [2]

Moody’s puts Spain’s Aa1 ratings on review for possible downgrade

Short-term ratings are affirmed at P-1; FROB’s Aa1 rating also placed on review for possible downgrade

London, 15 December 2010 — Moody’s Investors Service has today placed Spain’s Aa1 local and foreign currency government bond ratings on review for possible downgrade.

The main triggers for placing the rating on review for possible downgrade are:

(1) Spain’s vulnerability to funding stress given its high refinancing needs in 2011. This vulnerability has recently been amplified by fragile market confidence.

(2) A potential further increase in the public debt ratio should the cost of bank recapitalisation prove to be higher than expected so far, whether to meet higher-than-expected asset impairments or simply to retain the confidence of the wholesale markets.

(3) Increased concerns over the ability of the Spanish government to achieve the required sustainable and structural improvement in general government finances given the limits of central government control over the regional governments’ finances.

Full article here [1]

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URLs in this post:

[1] Zero Hedge: http://www.zerohedge.com/article/moodys-put-spains-aa1-rating-downgrade-review-eurusd-freefall

[2] Image: http://www.zerohedge.com/sites/default/files/images/user5/imageroot/havenstein/EURUSD%2012.15.jpg

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[5] S&P Rating Agency May Soon Downgrade U.S. Debt From AAA: http://www.prisonplanet.com/sp-rating-agency-may-soon-downgrade-u-s-debt-from-aaa.html

[6] Moody’s strips Britain of triple-A rating in major blow to Osborne: http://www.prisonplanet.com/moodys-strips-britain-of-triple-a-rating-in-major-blow-to-osborne.html

[7] Rating Agency Wars 2: The New Evil Empire Strikes Back – Dagong Says Likely To Downgrade US Even If Debt Limit Raised: http://www.prisonplanet.com/rating-agency-wars-2-the-new-evil-empire-strikes-back-dagong-says-likely-to-downgrade-us-even-if-debt-limit-raised.html

[8] Moody’s Expects To Cut US Rating Without Deal To Lower Debt/GDP Ratio: http://www.prisonplanet.com/moody%e2%80%99s-expects-to-cut-us-rating-without-deal-to-lower-debtgdp-ratio.html

[9] Moody’s Downgrade Of French Banks Imminent, Risk Waterfall To Follow?: http://www.prisonplanet.com/moodys-downgrade-of-french-banks-imminent-risk-waterfall-to-follow.html

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