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Euro remains soft after markets eyes are now on Greece's auction of 6-month T-bills today. Greece is seeking to raise EUR 1.25b and markets will be closely watching the result of today's auction as an indication of Greece's ability to raise short-term money...
Euro remains soft after markets eyes are now on Greece's auction of 6-month T-bills today. Greece is seeking to raise EUR 1.25b and markets will be closely watching the result of today's auction as an indication of Greece's ability to raise short-term money. S&P downgraded Greece's credit rating by 2 notches to B yesterday, the lowest rating among European countries, from BB- after a meeting by European finance officers unveiled that Greece may be allowed to extend the debt payment maturities of the 80B euro bailout plan. The agency said that 'as part of such an extension', the Eurozone creditor governments would "likely seek 'comparability of treatment' from commercial creditors in the form of their similarly extending bond and loan maturities".
S&P also worried about Greece's consolidation plan as the country's deficit was at +10.5% of GDP in 2010, short of the 9.6% target. Whether the government can achieve the target this year is 'uncertain' and 'a restructuring of official and commercial debt' may be an option. For other rating agencies, Moody's place Greece's B1 rating on negative watch, suggesting a downgrade may come soon. German newspaper Sueddeutsche Zeitung said Fitch has planned to downgrade Greece's rating to B or B- this week, followed by the agency's statement that 'Fitch rates Greece at BB+ with a negative outlook. The agency does not comment on market speculation'.
Sterling is relatively resilient after RICS house price gauge rose to the highest level in nine months in April. The RICS house price balance, showed number of real estate agents and surveyors which said price fell exceeded those gains by 21 percent points, compared to 23 in March. Though, RICS said that "activity still remains subdued and it is difficult to see it picking up materially over the coming months" and "there is still a long way to go before lending levels
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