EU Morning Report- Spain downgraded, focus on Italian bond auction

 

The euro (EUR) edged higher to 1.2610 from 1.2473. But the single currency remains under pressure as investors are preparing for the crucial Greek election in the weekend. Greeks will decide whether they want to stay in the euro as Syriza, the leftish party opposes to austerity measures while New Democracy party backs the bailout package. Worries about Spain’s banking sector and its rising government bond yields continued to weigh on the single currency. Further weighing on risk sentiment in the market is a sharp rise in German bunds raising fears that the deepening debt crisis in the eurozone is spreading to the eurozone’s largest economy, Germany. Credit rating Moody’s cut the credit rating of Spain while Cyprus was downgraded by two notched increasing concerns that it may be the next country to seek for financial aid. Focus now turns to Italy as it is due to sell up to 4.5 billion euros of government bonds today where a lower demand may trigger a rise in its borrowing costs.

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1 data generated by Trading Central™, 2 data obtained from easy-forex Inside Viewer™

3 at the time of writing

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