Moody’s has downgraded Greek credit rating again from “Ca” to the lowest level of “C”. The rating agency cited high risk of country’s default even despite deal with its bondholders on almost 70% debt write-off. The deal will allow Greece not to return about 107 billion Euros to the private investors. Moody’s stressed that planned reforms to avoid default are likely to face essential implementation risks.
American International Group (AIG), which obtained USD 182.3 billion rescue package after the breakdown of Lehman Brothers, is preparing to sell USD 6 billion of AIA group stocks to repay debt to US government. Insurer is offering around 1.7 billion AIA equities at HKD 27.15 to HKD 27.50 per share. After the sale AIG will keep about 19% stake of AIA.
British service sector declined in February though the index above 50 showed the economy is expanding. The service Purchasing Managers’ Index (PMI) dropped from 56.0 in the first month of the year to 53.8 in February. Nevertheless the service company confidence reached one-year record high amid growing employment across the sector.
The official SNB exchange rate for EUR/CHF is 1.2060 today; yield on 10-year Swiss Confederation bonds decreased to 0.68%. 3-month LIBOR CHF stands at 0.09%, and is within the target range of 0.00-0.25%. Swiss SMI stock index has gained 0.06% since the opening bell, and is currently fluctuating around 6153 points.
Japan’s Nikkei Stock Average lost ground on Monday as China lowered its economic growth goal and left target inflation rate unchanged at 4%. Nikkei 225 index lost 0.8% or 78.44 points and finished at 9,698.59 with energy and technology stocks tumbling most. Sony Corp fell 3.3% and Panasonic Corp slipped 2.2%. Olympus plunged 3.2% on rumours about new executive arrests. Inpex Corp gave up 2.1% anticipating the Friday decline in oil prices. Fast Retailing added 1.4% after reporting a 1.4% increase in February sales.
Daily maximum: 1.3236
Daily minimum: 1.3160
The single European currency reversed today versus the American dollar and broke through the daily forecast mean (1.3226) as monthly retail sales in Europe improved (0.3% act./0.0% est.). Daily Resistance: 1.3290; 1.3386; 1.3547. Daily Support: 1.3144; 1.3083; 1.3036. Daily Bias: Strongly bearish.
Daily maximum: 108.00
Daily minimum: 106.92
EUR/JPY slipped lower today on disappointing services PMI (48.8 act./49.5 est.) and sentix investor confidence (-8.2 act./-5.4 est.), breaching the daily forecast mean at 107.97. Daily Resistance: 108.41; 109.17; 112.29. Daily Support: 107.53; 106.62; 101.58. Daily Bias: Neutral.
Daily maximum: 1.5872
Daily minimum: 1.5786
The Cable commited a decline after touching the market participants’ daily target (1.5861) today as UK servicess PMI declined more than forecast (53.8 act./55.0 est.). Daily Resistance: 1.5924; 1.6066; 1.6159. Daily Support: 1.5873; 1.5755; 1.5397. Daily Bias: Neutral.
Daily maximum: 81.78
Daily minimum: 81.15
The Japanese yen depreciated versus the US dollar, piercing the daily forecast mean (81.63) on strong ISM non-manufacturing PMI (57.3 act./56.1 est.). Daily Resistance: 82.07; 83.02; 85.25. Daily Support: 81.29; 80.46; 75.51. Daily Bias: Bullish.
Daily maximum: 0.9161
Daily minimum: 0.9110
USD/CHF moderately moved upwards today on more-than expected US PMI data, crossing the daily target at 0.9110. Daily Resistance: 0.9176; 0.9290; 0.9493. Daily Support: 0.9073; 0.8863; 0.8531. Daily Bias: Bullish.
European Services Output Declines More Than Initially Estimated: Economy
Euro-area services output shrank more than estimated in February, led by Italy and Spain, as the region’s economy struggled to rebound from a contraction in the fourth quarter.
January factory orders fall most in over a year
New orders for factory goods dropped in January by the most in over a year and businesses cut orders for new capital goods, suggesting one of the drivers of the economic recovery faltered at the start of the year.
China Sets 2012 Growth Target at 7.5%, Stability Key
China aims to grow its economy by 7.5 percent in 2012 by following proactive fiscal and prudent monetary policies to combat downward pressure on growth and still high inflation, Premier Wen Jiabao said on Monday.