Moody’s Cuts Itay’s Rating

Moody’s Rating Agency just cut Italy’s debt rating by 3 notches to A2 with a negative outlook. However, the Euro was only mildly affected by this release as it is still trading above the 1.33 handle following the Bernanke statement earlier.

Bobbys Corner-Open Market-Sept.27.2011

Good Morning:

The Aussie and Kiwi rallied in overnight trading-as Asian equity markets also rallied-indicating that investors are seeking higher-yielding assets in these uncertain economic times.
In Euro Zone business-The Greek Finance Minister stated that the EU should stick with the deal that was agreed to in July. He feels that the EZ should be focused on growth-not looking for a default.  The Greek Parliament has a vote scheduled today regarding additional austerity measures that were imposed by the ECB,EU and IMF so that additional bailout funds can be distributed to the country.  One of the austerity measures is a new property tax which is going to be a tough sell to their fellow countrymen-but is expected to pass during today’s vote.

World equity markets rallied, as US Futures are also posting higher numbers as we speak.  So it looks like the equity markets will open higher-and let’s hope they stay that way during the day.

Gold and Oil are also trading in positive territory this morning.

HAVE A GREAT DAY & GOOD LUCK

GERMAN IFO IN TEN MINUTES!

ECB’s Ordonez

• Spain has to recognize it has problems; must tackle massive unemployment.
• International financial crisis is not Spain’s biggest problem, deep spending cuts are necessary in Spain.
• Spanish central gov’t and regional gov’t must meet deficit target.
• Caja restructuring to be completed as forseen; Spain bank problems affect part of system.
• Inability of Eu to solve problems partly to blame  for higher financing costs.
• Spain can only cut risk premium with reforms.
• Spain’s spread over 200 BPS cannot be accepted for a long time.

EUR/JPY receiving support from previous lows

We’ve seen a sell-off in the euro against all of the major currencies this session. See here, the pair was testing resistance at the 200 hour moving average and then moved lower and completed a full hourly retracement. Following that, the pair has sold off another 100 points where it appears to have found some support from 113.85; a previous support level. If the rebound continues, we look back towards 114.90 as the target.

Fitch analyst says no change seen at the moment for outlook or rating on Italy.

EU’s Rehn

• We must be firmer in implementing reform.
• Economic recovery in Europe is maintaining momentum.
• Growth is becoming more balanced, self-sustained.
• There is no Euro crisis; it is a crisis of states.
• Have contained crisis to three countries.
• Needed to prevent Greek default to avoid downward spiral.
• Greece has to seriously reinforce budget steps, structural reforms before new steps taken.
• Expects Greek government to announce new steps shortly.

Eurozone manufacturing PMI: 54.8, Services PMI 55.4

The Composite index fell to 55.4 from 57.8 and below the expectations of 57.3.  Overall the PMI data was weaker with Germany also showing lower than expected falls with PMI Manufacturing down to 58.2 from 62 (expected 61) and PMI services coming in at 54.9 from 56.8 (expected 57.0).

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