Now it's Germany's turn.
Moody’s changes Germany, Netherlands outlooks to negative
It also warned that Germany and other countries rated ‘Aaa’ might have to increase support for troubled states such as Spain and Italy that are struggling to finance their deficits.
After the worst selloff since December, the only elements of note this morning are:
- German business sentiment fell more than expected in June
- 15 banks downgraded by Moody’s
- Morgan Stanley is taking the brunt of the press reaction (nyt)
- European markets are broadly lower with the CAC40 -1.1% and the DAX down 1.3%
- Gold unchanged
- 10yr is flat
- EURUSD is flat
- S&P futures are dead catting it.
Perversly, earlier downgrades in Europe were followed by an up day, that doesn’t look to be the case this morning.