Andspain Will Also Tap The Markets

FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400) USD EURUSD continued its post-summit slide as the market has reverted to the conclusion that not enough has been done. Although some stability measures for financial markets have been welcome, the summit agreements themselves raise plenty of new questions, to which the market is not convinced that the answers would be favourable, such as the ratification process and the relevant democratic mandates by individual EU governments. In addition, investors are also querying whether enough has been done to avoid some major downgrades in the coming weeks and months from all the ratings agencies. French President Sarkozy appears to be resigned to the fact that his country will lose the coveted AAA rating, which would immediately translate into new ...

FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400) USD The euro did not manage to sustain its Friday strength but at this stage the Eurozone’s leaders would probably be content that the market is not selling off en masse and this week’s bond supply can simply pass without incident. There were no major developments over the weekend, though financing for the IMF appears to be taking shape with major central banks inEuropeready to increase their commitments, though as ECB President Draghi warned last week, the legalities still need to be resolved. The ECB itself will be keeping a close eye on the banking system to gauge the effect of its announcements at last week’s policy meeting. Taking into account the ECB’s ‘menu’ for the banks and the EU decisions, perhaps markets have less reason to fear ...