On Tuesday Euro zone finance ministers will meet to bolster the European bailout fund and reduce contagion in European bond markets. Through the European rescue fund, known as the European Financial Stability Facility (EFSF), European ministers will insure sovereign debt with guarantees of insuring short term government debt, purchasing government bonds, and guaranteeing bank debt.
Moody’s Cautions of Bank Downgrades for Europe’s Banks
Moody warned of potential bank downgrades for European Banks such as BNP Paribas SA, Societe Generale SA, Uni Credit, Banco Santander SA, and Dexia. Also under review are Credit Suisee AG and UBS AG. Moody’s cited concerns about the potential removal of government support.
Fitch Downgrades United States to Negative Outlook
Fitch maintained the United States’ AAA credit rating while lowering its outlook to negative from stable, citing declining confidence about the effectiveness of U.S. fiscal measures to reduce its long term debt.
Moody’s wrote that “declining confidence that timely fiscal measures necessary to place the United States public finances on a sustainable path will be forthcoming.”
A negative outlook means that there is a slightly higher than 50% chance that Moody’s will issue a full credit downgrade over the next two years.
Japan’s Unemployment Level is Rising
Japan’s unemployment rate increased in October to 4.5 % which is up from 4.1% in September and 4.3 % in August. Analysts estimated Japan’s unemployment rate for October at 4.2%.
A strong Yen is partly to blame to Japan’s rising unemployment. TDK and Panasonic are slashing jobs.
La Tribune: S & P May Downgrade Outlook of France’s Credit Rating
According to a new report in La Tribune, the S & P may downgrade France’s outlook with their AAA credit rating during the next 7-10 days.