FECIMA

Credit merry-go-round or vicious circle Friday's S&P announcement was much anticipated by the direct markets however the connotations are very significant. The ratings of seven countries were left unchanged: Belgium, Estonia, Finland, Germany, Ireland, Luxembourg and the Netherlands. Five countries saw a one notch downgrade: Austria, France, Malta, Slovakia and Slovenia. Four countries were given two notch downgrades: Cyprus, Italy, Portugal and Spain. (Greece was excluded from consideration). Of the EU17, 15 retain a negative outlook (except Germany and Slovakia). The European Financial Stability Facility is a slightly different argument however the contingent liability argument along with the increased borrowing costs from the majority of the EU17 will mean that the EFSF is unlikely to keep its AAA rating and this could put further pressure on the member states - a rating downgrade of the EFSF will significantly reduce the firepower of the EFSF perhaps to

The euro recorded minute gains against its major counterparts as the markets open, following the downgrade of 9 eurozone nations by S&P on Friday. More specifically Italy, Spain, Portugal and Cyprus experienced a 2-notch downgrade, while Germany kept its triple A rating untouched. The move sparked a plethora of comments by EU officials, focusing on the timing of the downgrade and the need for a

Markets were agonized on Friday and the euro was under heavy downside pressure with the selloff across the board on the news that France lost its top credit rating, and as the news were confirmed from Standard & Poor's after the exit of European markets for the weekend the agony is likely to remain on Monday on Asia and on Europe especially with the lack of major data and absence of U.S.

Risk appetite soured quickly on Friday afternoon, with the euro falling sharply on rumours of imminent S&P downgrades. The ratings agency eventually confirmed that France and Austria had lost their AAA ratings, while Italy, Spain, Portugal and Cyprus each had their

U.S. Dollar Trading (USD) stocks slumped and the Dollar soared on Friday with S&P downgrading most of Europe on Friday night. The market had been expecting such a move which included France and the after the initial heavy sell off was able to recover some of the losses into the close. In US stocks, DJIA -48 points closing at 12422, S&P -6 points closing at 1289 and NASDAQ -14 points closing at