France precarious rating Tuesday ushered in a timely Fitch-style “guarantee.” The rating agency said the same day, this is not expected to cut France’s AAA rating. The comments are very encouraged by the market, day trading in Europe, major indexes rose across the board, a number of stock index rose more than 2%. The euro has also come to rebound.
but debt crisis future is still rough. Overseas media reported on Tuesday, the Greek government will announce next week a draft outline large-scale deficit reduction, and then the country will face from the International Monetary Fund (IMF) and the EU torture, the two organizations decided to Greece could further assistance funds.
France temporarily relegation
Fitch sovereign ratings director Ed Parker said on Tuesday that some of the existing French-based economic and financial trends, this is expected to France will not cut the AAA credit rating, but did not release the other two rating agencies downgrade warning to France. In addition, Fitch said, Italy or Spain, may be cut one or two state-level.
to the end, Fitch will be Belgium, Spain, Slovenia, Italy, Ireland and Cyprus’s sovereign credit rating placed on negative watch list, France’s rating outlook is negative. David Riley, director of the company’s rating, said, when Fitch completed six eurozone countries assessment, is likely to cut Italy’s rating, these six countries had been placed on negative Fitch credit watch list.
Citibank on Tuesday released a report that within the next two to three quarters of the euro zone countries are likely to encounter more degradation, including Austria, Belgium, France, Greece, Italy, Portugal and Spain, but out of euro zone countries will not.
Greece entered a critical stage of debt reduction
Tuesday, the Greek government issued a total of 16.25 billion euros of six short-term government bonds, the average bid rate of return 4.9%, lower than the previous auction. According to the agreement reached 20105, Greece, in addition to short-term bonds is the only loans available financing instruments. Last release to 1230 in Japan, was raising a total of 2 billion euros of Greece.
In addition, the Greek government and investors to reduce total debt negotiations are still ongoing, aims to convince investors to agree to this at least half of the debt relief negotiations, is the first large-scale euro area debt restructuring transactions .
held according to the 1026 EU assistance programs reached the summit, Greece plans to reduce its total debt ratio of 50%. Fitch said the debt relief program if implemented, would constitute “an event of default”, but the International Swaps and Derivatives Association, said the move will not trigger the credit default swaps (CDS) of the payment.
Germany and France after the meeting on Monday warned that if Greece and the creditor banks can not reach an agreement on the debt swap, it is difficult to obtain follow-up relief funds. German Chancellor Angela Merkel said, “is likely to end in a European Union consider the adoption of a new treaty to strengthen the euro area budgetary discipline.”
overseas media reported Tuesday that Greek Prime Minister Papademos plans for next week a € 100 billion deficit reduction (about $ 129 billion) draft outline, then Greece will negotiate with the EU and IMF officials the terms of the second round of financing. The consultation must be completed before the 320, because by then Greece will have 14.5 billion euro bond expired.
interest-rate strategist at Nomura International 莱夫泰里斯法尔 Marquise said Greece will receive about 890 billion euros of new capital, it is also hoped that the European countries can make this commitment.
euro remains under downward pressure
Tuesday, Greece and France, a successful auction of Treasury temporary protection rating of good news that the European stock markets rally back. 19:45 GMT Tuesday, the major European stock indexes rose across the board, the Franco-German stock market rose more than 2%, the UK stock market rose more than 1%. Euro also rebounded slightly against the U.S. dollar reported $ 1.2781, or 0.13%.
However, due to the huge debt, the confidence of investors in Greece assets declined rapidly. 20138 issued in the country expires, the interest rate of 4% coupon bond is currently trading around only 21% of face value. Fears, Greece in order to obtain financing and support measures introduced by the country’s economic growth will be inhibited. Affected, Greece 2 earlier this week, bond yields hit a record 176%.
Greece and other countries of the impact of the final analysis, the credibility of the entire euro area, continued weakness in the euro is the best evidence. Most analysts have said is not optimistic about the future of the euro. From fundamental and technical point of view, the euro is expected to continue weakening.
In addition, overseas media that traders borrow euro investment behavior is increasing global assets, this change marks the carry trade on the foreign exchange market started to recover. Analysis pointed out that, on the one hand, the United States launched the third round of quantitative easing monetary policy (QE3) expectations are constantly cooling; the other hand, the market forecast the European Central Bank will be further reduced information is a high probability event. These factors have contributed to the euro as investors around the world carry trade funding currency.
reports and analysis that these transactions are mainly based on the premise of the euro will continue to fall. Traders is common practice to borrow euros, and then sell the use of other currencies, the euro Jiancang; when the loan repayment, traders will benefit from the depreciation of the euro.
Goldman Sachs recently released a research report pointed out that the gap between the general economic recovery in the U.S. and Europe that the euro continues to pressure. Economic data in the United States continues to improve at the same time, the ECB continued to expand the balance sheet. Goldman Sachs believes that this pressure is likely to remain 1-2, and the euro fell to $ 1.20.
Tags: Fitch, Fitch downgraded France to lift European stocks ready for alarm, FranceRelated posts
0 comments:
Post a Comment