Moody's to Revisit Euro Area Sovereigns in Q1 2012
On Monday morning, ratings agency Moody's stated that they would revisit the ratings on all Euro Area sovereigns in the first three months of 2012.
The European Summit—which had been anticipated all last week—concluded early last Friday.
Given expectations, the results seemed to be underwhelming. Yet, US equity futures were trading up Friday morning, perhaps evidence of the fact that investors had bought into the deal enough so as to calm concerns. Problems still remain.
Moody's said in its report that Euro Area sovereigns remain under pressure as decisions by Euro Zone officials are lacking decisiveness.
From the release, "Overall, Moody's believes that the announced measures reflect the continuing tension between euro area leaders' recognition of the need to increase support for fiscally weaker countries and the significant opposition within stronger countries to doing so. Amid growing pressures on euro area authorities to act quickly to restore credit market confidence, the constraints they face are also rising. The longer this remains the case, the greater the risk of adverse economic conditions that would add to the already sizeable challenges facing the authorities' coordination and debt-reduction efforts."
Equities and commodities across the board are seeing bearish sentiment in early trading. Gold futures are down about 2.5%, crude oil is down about 1.5%, and U.S. equities are down nearly 1%. the U.S. Dollar Index is seeing strength, breaking above $80.
