ZuluTrade Blog

Spain's rating was cut by Fitch and Bernanke didn't inspire markets

Market View | Friday, June 8, 2012 3:53 AM GMT

Good Morning ,

- Here we are again - risk off again. China cut rates yesterday, which let
people believe what other bad news could come from there, Spain's rating was
cut by Fitch and Bernanke didn't inspire markets either. EURUSD dropped to
1.2510 and AUDUSD lost almost 1.5 % and fell to 0.9838.

- Stocks: Nikkei -2.08 %, Hang Seng -0.62 %, Shanghai Composite
Dow Jones +0.37 %, S+P500 -0.01 %

- Fitch Ratings downgraded its long-term foreign and local currency issuer
default ratings on Spain to BBB from A, with a negative outlook. The BBB
credit rating is just a notch higher than junk status. The firm said Spain's
"high level of foreign indebtedness has rendered it especially vulnerable to
contagion from the ongoing crisis in Greece."

- Spanish Prime Minister Mariano Rajoy said he's talking to his European peers
about how to shore up the country's banks as Fitch Ratings cut Spain's credit
grade to within two steps of junk.

- Federal Reserve Bank of Atlanta President Dennis Lockhart said the European
debt crisis has worsened in the past six weeks, raising the risk the region's
slump will hurt U.S. growth.

- Federal Reserve Bank of Dallas President Richard Fisher said U.S. lawmakers
must bring federal spending more in line with revenue as the Chinese yuan one
day may rival the dollar's dominant role.

- Federal Reserve Bank of Chicago President Charles Evans said that "more
accommodation would be good" for the world's largest economy as the recovery
stalls.

- Japanese Finance Minister Azumi spoke to reporters in Tokyo:
* Azumi declined to comment on whether the exchange rate was stable after the
G7 phonecall
* Any change to the Bank of Japan law to allow the bank to buy foreign bonds
needs cautious discussion

- Japan Data Recap                      Period    Survey      Actual      Prior
* Current Account yoy nsa              Apr       2.8 %      -21.2 %   -8.6 %
* GDP Final                                  Q1        4.4 %        4.7 %     4.1 %
* Bank lending                             May        -              0.3 %     0.3 %

- Australian exports rebounded in April, narrowing a trade deficit and
signalling an upbeat start to the second quarter. The significantly lower
deficit figure was fueled by gains in commodity exports that were partly
linked to a recovery from weather-related disruption in the first quarter.

- RBA Stevens expressed optimism about the nation's economy and cautioned
against monetary policy settings that could reignite asset bubbles, the risk
of which he said was low. "The intended effect of recent policy actions is
certainly not to pump up speculative demand for assets," Stevens said. "Our
judgment is that the risk of re-igniting a boom in borrowing and prices is
not very high, and this was a key consideration in decisions to lower
interest rates over the past eight months."

- S.Korean centralbank left rates unchanged for 12th month at 3.25% as widely
expected

- New Zealand's economic recovery will remain modest this year, reflecting high
household debt that's slowed consumer spending, the International Monetary
Fund said. The economy will grow 2.3 percent in 2012 from 1.1 percent
last year, the IMF said in its Article IV consultation report released in
Washington. Growth will then accelerate to 3.2 percent in 2013, it forecast.

- 1430 US Trade Balance Apr
- 1600 US Wholesale Inventories Apr
- 0800 Germany Trade Balance Apr
- 0800 Germany Current Account Apr
- 0830 Banque De France Business Sentiment May
- 0830 France Trade Balance Apr
- 1000 Italy Industrial Production Apr
- 1000 ECB Nowotny
- 1530 ECB Constancio
- 1030 UK BOE/GfK Inflation next 12 months
- 1030 UK PPI May
- 0930 Sweden Budget Balance May
- 0930 Sweden Industrial Production/Orders Apr
- 1415 Canada Housing Starts
- 1430 Canada Labor Productivity Q1
- 1430 Canada Intl. Merchandise Trade Apr
- 1430 Canada Unemployment Rate May
- 1430 Canada Net Change in Employment May Saturday
- 0330 China PPI May
- 0330 China CPI May
- 0730 China Industrial Production May
- 0730 China Retail Sales may
Sunday
- n/a China Trade Balance May

  (CET)

Have a nice weekend !

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