Rating agencies threatening punishment

Moody’s followed S&P yesterday in warning Greece that a downgrade or 2 may be forthcoming in a few months if they “significantly” deviate from the plan of austerity. Further down the dangerous road though, S&P said “a sovereign default is not going to happen in the euro zone.” They likely say this because of the bailout scenario if push comes to shove. The Greek 10 yr yield is higher by 8 bps to a 2 1/2 week high, Greece 5 yr CDS is trading around 390 bps, now up 40 bps in the past 3 days and Greek stocks are down almost 2%. Euro zone economic confidence fell a touch from Jan and was slightly below expectations but Germany’s Feb jobs figure was better than forecasted as unemployment rose by 7k vs the consensus gain of 16k. Bernanke repeats his testimony in front of the Senate today with only the Q&A of course being different. Jobless Claims and Durable Goods are the two key data points of the day.

Print Friendly, PDF & Email

Posted Under