One day after stocks around the globe rallied on news that Greece’s debt crisis made significant progress, credit agency Moody’s downgraded several nations in the Eurozone. Paired with word that the European Union found the Greek austerity package to be unsatisfactory, stocks were unable to move higher.
Overall, benchmarks were down on Tuesday in all major markets with the exception of Italy. The FTSE dropped 0.1%, the DAX fell 0.2%, the CAC was down 0.3% on the session, and the IBEX lost 0.19% of value.
Today’s European decline halted a one-week rally that was staged on the positive news surrounding Greece. Moody’s Investors Services downgraded six nations within the EU: Malta, Slovenia, Slovakia, Spain, Italy and Portugal; it also stated a negative outlook on the United Kingdom and France. Portugal’s credit rating is in the worst shape of the eight, now at a level of BA3, down one notch. Spain’s rating was cut two notches from A1 to A3.
Furthermore, EU leaders hold that they have not received enough assurances from Greece that the austerity measures they passed over the weekend are sufficient to secure a new bailout. As such, a meeting over the subject was cancelled, stoking new fears over the Euro debt crisis.
The Italian government staged a debt sale on Tuesday, which went well. The government successfully sold $7.9 billion at an average yield of 3.41%, the lowest since March of last year. This was achieved despite the Moody’s downgrade, something which most investors believed to be an inevitability.
In Commodities, Brent crude was down earlier, but has gained along with light sweet crude oil to 118.17; crude has risen to 101.00 USD/bbl. Gas oil closed lower to trade at approximately 993.25. Natural gas made a large move to the upside on Tuesday, currently trading at 2.533, up 4.2%.
As for precious metals, copper dropped 0.69% to trade around 382.05. Gold prices fell slightly as well, losing about four-tenths of a percent to 1,717.70 USD/t Oz.
Finally, in currencies, the Euro and British Pound Sterling lost ground to the US Dollar, now at levels of 1.3084 USD and 1.5649 USD, respectively. The Swiss Franc and the Danish Kroner, however, both gained on the dollar by about half a percent each.
